Granny Flat Rental Yield Calculator

The Australian average rental yield for residential property sits between 4% and 6% gross. Granny flats often achieve yields of 6–12% or higher because their build cost is significantly lower than the main dwelling while generating substantial rental income. A yield above 6% is generally considered above average, while anything over 8% is excellent for Australian conditions. Location is the key driver — high-demand rental areas in Sydney, Melbourne, Perth and Brisbane consistently deliver stronger yields.

Gross rental yield is calculated by dividing annual rental income by the total build cost, then multiplying by 100. For example — a granny flat that costs $130,000 to build and rents for $450 per week generates $23,400 per year. Dividing $23,400 by $130,000 and multiplying by 100 gives a gross yield of 18%. Net yield subtracts annual costs (rates, insurance, maintenance) before dividing. Use the calculator above to run these numbers instantly for your specific figures.

Weekly rent for granny flats varies significantly by location. In Sydney, granny flats typically rent for $400–$700 per week depending on size and suburb. Melbourne and Perth range from $350–$550 per week. Brisbane and regional areas typically range from $280–$450 per week. A well-finished 60sqm granny flat in a high-demand area of Western Sydney can comfortably achieve $550+ per week. Read our full guide on maximising granny flat rental income for location-by-location data.

Payback period depends on build cost and weekly rent. A $130,000 granny flat renting at $450 per week generates $23,400 per year gross — a payback period of approximately 5.5 years before ongoing costs. After costs, a realistic payback is typically 6–10 years for most Australian markets. This is significantly faster than a standard investment property, making granny flats one of the most efficient residential investment vehicles in Australia.

Typical ongoing costs for a rented granny flat include landlord insurance ($800–$1,500 per year), council rates apportioned to the granny flat ($500–$1,500), water and utilities ($500–$1,000), and maintenance and repairs ($500–$2,000). Property management fees add 7–10% of weekly rent if you use a property manager. Total annual ongoing costs typically range from $2,000 to $6,000 depending on your situation. Read our granny flat insurance guide for full details on cover options.

Yes — if your granny flat is rented to someone who is not a family member and generates a rental loss (costs exceed income), that loss may be deductible against your other income under negative gearing rules. Interest on a loan used to build the granny flat may also be deductible. Tax treatment of granny flats is complex and depends on whether you live on the same property, ownership structure and ATO guidelines. Always speak with a registered tax accountant before making investment decisions.