Granny Flat: New Affordable Housing Trend

March 17th, 2023  / Author: Cesar Gomez
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Did you ever wonder what is a granny flat and why is it called that? Is it just a flat where your grandma lives? Well, it could be. But essentially, a granny flat is an additional living space on your single-family property. It can be a living space for the elderly you are taking care of, a home office, a guest house, or a renting unit.

The main thing is that this accessory dwelling unit (ADU) has living spaces independent from those in your main residence. It has its own kitchen, bathroom, living room, and bedroom, and does not share any of those with the primary dwelling.

This additional space can be added or renovated, it can be inside or outside your house, it can have a separate entrance, or you can share a hallway. There are many possibilities and the best thing about it is that ADU is great affordable housing, especially for young people who are just starting their careers.

There are many pros to having a granny flat, depending on what you are using it for. Whether you decide to rent it out, or to use it yourself, here we laid out some pointers for utilizing your property and creating an accessory dwelling unit.

In Other Words…

The name granny flat comes from the popular usage of the space, where instead of the elderly family members living alone or in a nursing home, they lived independently on your property. Another popular word for this space is an in-law suite, or mother-in-law suite, and for the same reason.

It is a great way of symbiotic cooperation between generations. In-laws can be helping with child care, and a younger couple could be helping with transportation, health issues, or other day-to-day activities.

Additionally, you may have heard of pool houses, guest houses, laneway houses, and backyard cottages. Those are all forms of granny flats, although built for a different purpose. But all those units have an independent living space for one to three people.

You know how in sitcoms there is always that one friend who will most likely stay single, so the others joke about how he will live in their “place above the garage” or a “basement apartment”? Those are also types of granny flats, but unlike a laneway home, these are structurally attached to the primary dwelling.

The point is that however you decide to name that added space to your house, it will be useful to you and the others. Here are a few ways to help you add a granny flat to your primary residence.

Should You Add a Granny Flat to Your Primary Dwelling?

When asking yourself should I convert my single garage to a granny flat, you need to know what could be the purpose of that additional space. There could be many reasons behind this decision, but it is important to figure out how to build and design accordingly.

You could rent it permanently, and be a figure in creating affordable housing. If you are not comfortable with sharing your property with someone for a longer period, you can always turn your granny flat into temporary accommodation, such as an Airbnb. The need for a home office is a legitimate reason and an investment in both your home and your mental health.

Before you do anything else, consult with your municipality to check what permits you need and the conditions you need to fulfill to start building your ADU.

You will probably need to get a building and utilities permit (for electricity, water, etc), and depending on where you live, you might need to check height restrictions and hazardous clearance. In case you are just renovating your basement, there is a chance that you don’t need any permits, but you should nevertheless check with local authorities.

Now that you have the bureaucratic and motivational part done, it is time to think about your granny flat designs. Usually, you would need to fit everything that a house needs into a tight space. This does not mean that all granny flats are small - many of them are much bigger than an average apartment in a metro area. Still, it is all about the functionality of the space.

Does it Add Value?

A granny flat adds, on average, 20-30% value to a single-house property. Plus it can create income if you rent it. The cost of building an ADU is different depending on many factors, the first one usually being how much are you willing to pay. Some assessments state that the price is somewhere between 25,000 and 160,000 dollars.

The wide range can be explained by the fact that there are at least four types of in-law suites, and each has its pros and cons. Those that are attached to your primary dwelling are less expensive but much more invasive to your family’s privacy. Detached granny flats are more expensive, but give you and your guests a lot more autonomy and privacy.

Structural Forms of the In-Laws Suite

An empty or rarely used garage can be easily transformed into a functional living or office space, that way you are utilizing every square foot of your property. If you have a fixer-upper basement or an attic but do not need that space for your family, you might as well convert them into a granny flat while renovating. An ADU will add more value to your house, as opposed to game rooms and cinemas that people sometimes put in those spaces.

A mother-in-law suite could be added on top of your garage with an additional independent entrance. Many granny flat designs online show how to use the space, but when building something on top of your property is it best to consult an architect.

The most expensive and permit-needed ADU is to build a stand-alone unit, completely detached from the primary residence. If you were to put that granny flat up for rent, both of your households would be living separately and would only be sharing a lawn.

Insurance for a Granny Flat

Consult with your insurance company about what kind of coverage your potential mother-in-law suite would have. There is a chance that you are not covered if you have a detached unit or an over-the-garage unit. Homeowner insurance probably covers converted garages, basements, and attics.

You will likely need to expand coverage for the added dwelling space because your homeowner insurance was designed by the calculations of how much money it would take to rebuild your home.

If you put your granny flat up for rent you will most likely need to cover it with the landlord's insurance. It is what would be the safest in case of rent losses, but also in case of any incidents. If the granny flat holds a different postal number than your residency, this could be a legal necessity, otherwise, it is just a suggestion.

Renters' Rights in ADU Accommodation

Renters of AUD in Los Angeles are protected by rent control, but this is not the case for the whole country. Some investors are buying single-family homes, adding granny flats, and renting them out. This creates confusion because a single-family property becomes a multi-family property and the regulations are not clear.

Since it is quite a new trend in affordable housing, a granny flat is yet to be concretely and clearly added to state and federal legislation. The fact is that it is much less expensive than renting out a condo in Los Angeles or San Francisco.

Selling a Property with a Granny Flat

Granny Flat

If you have a property with a granny flat and want to sell it for a top dollar, contact SleeveUp Homes and get the best deal. You can even get a cash offer and you do not need to renovate - we look for potential, but still pay full price.



If you want to sell fast and are worried about how long the traditional process takes, and the commission and fees involved, consider working with SleeveUp Homes.