Granny Flat vs Dual Occupancy. What is better?

Two dwellings on one block can change the shape of your portfolio—but only if you choose the right path. We break down the real differences between a granny flat and a dual occupancy, why titles matter more than most investors realize, and how overlays like flood, bushfire, and noise can quietly add cost or kill a deal before it starts.

We share a practical framework to navigate council rules, minimum lot sizes, and setbacks so you can confirm fit before you buy. You’ll hear how a granny flat acts as a yield amplifier—often pushing blended returns to six, seven, even eight percent—why larger LGAs allowing up to 120 square meters unlock stronger tenant demand, and what separate metering means for clean cash flow. Then we shift to dual occupancies: the equity and yield amplifier that can be strata titled, enabling builds in the $450k–$500k range to value at $800k-plus on completion. We outline typical land thresholds from 600 to 800 square meters and beyond, the added six-meter road setback, and how to structure timelines to pull equity in six to twelve months.

This conversation is built for investors who want clarity. If serviceability is tight, a well-designed two or three-bed granny flat can stabilize holding costs and strengthen your base. If you’re chasing scale, dual occ offers multiple exits: hold both, sell the front and keep the new for depreciation, or sell the new title to reduce debt and redeploy. Along the way, we stress the due diligence that protects margins—mapping services early, budgeting for BAL ratings and acoustic treatments where needed, and using local comps for rents and end values.

If you have a block that might qualify, or you want to buy with a secondary dwelling in mind, we can help you assess overlays, sizing, and feasibility so your next move compounds. Subscribe, share this with a fellow investor, and leave a review telling us which strategy you’d choose and why.

Chapters

• 0:00 Setting The Stakes: Strategy Choice
• 0:59 Due Diligence And Overlays
• 3:33 Flood, Bushfire, And Noise Risks
• 3:53 Defining Granny Flat Vs Dual Occ
• 4:31 Yield Play: Granny Flat Economics
• 5:07 Equity Play: Dual Occ And Strata
• 6:17 Matching Strategy To Serviceability
• 7:31 Granny Flat Size And Setbacks
• 10:26 Dual Occ Requirements And Setbacks
• 12:08 Portfolio Uses And Exit Options
• 15:23 How We Help And Next Steps

Transcript

SPEAKER_00: 0:00

Granny flat or dual occupancy, which strategy is better? In today's episode, we are going to be breaking down these exact strategies. We are going to be going through the planning and overlays with these strategies and ultimately what strategy is best, the pros, the cons, and based on your individual situation, what might suit. My name is Casey Taylor. I'm the host of the Tailored Property Wealth podcast. And some of these strategies that I'm going through today, I'm actually implementing within my portfolio right now. I have 10 investment properties in the portfolio and valued at$9 million. So we're going to get straight into it today. I think there's going to be a lot of value in this episode. If you are a property investor or you're looking to be a property investor and you want to build a meaning, meaningful portfolio and you want to get results and get that cash flow long term. One of the most important pieces of being able to implement a Granny flat or implement a dual occupancy play is your due diligence, is your overlays, your planning to make sure that the asset that you're securing meets those requirements. Okay. It's all in the purchasing piece up front to get that right. And you might not do this strategy now. You might not do it in six, 12 months. You might come back to this in five years' time. Once you do some land banking, you build up a portfolio of existing properties. And then you want to come back over the top of your portfolio and add some yields, add some equity into the piece. I'm going to go through just a couple of things we look at from that due diligence and planning piece. And then we're going to go into what the granny flat is, what a dual occupancy is, and the requirements in some of the local government areas that we target and what that looks like from a land component, what that looks like from a frontage and dimensions component as well. We want to be understanding the flood risk on that piece of land. We want to be doing that whether we are building on a port on a property, I should say, or not. That should be an extensive and important part of your due diligence process when purchasing. Another one you want to be taking into consideration is bushfire. Is it in a bushfire overlay? Because that can actually, it might not impede purchasing that property and passing from a due diligence point of view, but it may mean when we're building a property that there are additional things that you need to add to that build, which can blow out the costs as well. So that's another one. We also want to understand noise pollution and how that particular build or that piece of land is affected by noise pollution. This is a big one for us with our due diligence process. However, again, the same as the bushfire, if it's in an area that is affected by noise pollution, we may need to go and add additional things as part of that build, which is increasing the cost of that build. They are some really important things you want to be adding, like I said, to your due diligence. But when we're looking for granny flats where we're looking for dual occupancies, they are important. What is the difference between a Granny flat and between a dual occupancy? They are both second secondary dwellings that are being added to a property. But they mean very different things on how they can be resold, how the values work on those properties as well. So from a Grenny flat perspective, as I said, that is a secondary dwelling. However, building that secondary dwelling, it will be under one title as the same existing build on that piece of land. What that means is when you go to resell that property, you will not be able to sell that, sell that as two separate dwellings. Now, that doesn't mean you can't rent those both individual builds out to separate tenants and separate tenancies, but you just you can't sell that in the future under two separate titles and two separate properties. The Grenny flat play is a really a yield play. If you buy a couple of properties, you might then come back over and execute on a Grenny flat on one of those. And the yield is quite high on these Granny flats. Okay. Depending upon the area where you target that Granny flat is what that yield's going to look like. But you can be looking at six, seven, eight percent yields once you build that Grenny flat. So it is a very strong rental income component that you can come back over and improve those holding costs or increase your passive income over time. The dual occupancy play is adding a secondary dwelling. However, this secondary dwelling can be then strata titled and be on a separate title to that of the existing dwelling. All right. And that means in the future you have the option to sell both properties individually. And because of that, there's some upside benefits from an equity point of view because you're typically going to be able to build for much lower than the resale of that new property on a separate title, being the Strata title. For example, we implement this strategy right now. This is our yield and equity amplifier strategy, and we're building for$450,000,$500,000. And the valuations on completion are$800,000 plus. We implement this for clients who are very motivated to get in, be passive in their investment building journey, where they can build this on that existing dwelling. They can pull equity out in a six to 12 month period and go again into another asset, diversify into another location, and then all of a sudden they've gone one into three properties in a short period of time if they go out there and they action it quite quickly. Doesn't mean you have to do that straight away. You can sit on it for a number of years, like I did say. But this is a really solid strategy for those who want to get in and build quickly. These strategies both serve extremely well. Sometimes it might be the granny flat play you want to implement because your serviceability won't allow the full$50,000 to$500,000. We can go out and build a granny flat for$200,000 to$250,000, but you're not getting that equity uplift per se. Whereas with the dual occupancy, you are. The dual occur there definitely is a little bit more involved in that process. But if you surround yourself with the right team, it is still going to be a seamless process through that. So that is the key differences between the Granny Flat and the Dual Occupancy play. We also implement the Granny Flat, which is our yield amplifier strategy as well. So depending upon the strategy, your risk profile, your income, your serviceability, and where that's at is to what strategy we're potentially going to implement. Now we're going to go through some size requirements for the Grenny flat and typically what that build looks like from a size point of view, from a number of bedrooms, and then we're going to compare that to the dual occupancy. Now, each LGA is different in terms of what their requirements are. Typically, on average, the block needs to be from 450 meters squared to 600 to 1000 meters squared. That does depend on the LGA. We really want to target blocks that are 600 plus for this strategy. Just give you a little bit more room for the granny flat to be able to implement that. 450, obviously, you can do that in LGAs, but it's probably squeezing a smaller, it's squeezing a smaller dwelling. There is then requirements based on those land sizes as to what kind of dwelling you can build in terms of size. Now, some LGAs, depending on that land and where it's situated, you can build up to 120 meter squared granny flat. That is a three-bed, two-bath granny flat. That is a small home. So it's not this little shack that is completely clapped out like it used to be where your granny live, for example. It is a very nice finished dwelling and it is large in size. That's in one LGA. In some other LGAs, it can range 60 to 70 meters square granny flat. We're still looking then at a two-bed, one-bath dwelling. However, it's a lot smaller than that of the 120 meters squared. So there's some great options there to be able to implement. Obviously, depending on size, is to where the build cost is going to be. Some of the setback requirements that you're going to need once you're looking at that piece of land is approximately a 1.5 meter boundary from your rear and side boundaries. Now, if we've then got infrastructure on top of that, sewer lines, stormwater, we then need to factor another 1.2 meters. So this is crucial in your due diligence process to make sure the individual granny flat you can add to that is going to fit within the boundaries. Now it needs to also be 1.8 meters from existing dwellings on site. So there's some key components that you want to be factoring in. Okay. That is for the Granny Flat play. These are a really, really solid option. There's some great floor plans that you can implement with this strategy, especially if we're looking to go up to that 120 meters squared. Now with a dual occupancy, it's going to be a bigger dwelling and it's going to be a four-bed, two-bath, two-garage style property. It's a massive build, essentially. And it can be quite desirable when you're implementing this strategy. Now the requirements for this are higher than that of the Granny Flat. With a common sense approach, we know it's going to be a bigger build. We need more space to implement that strategy. It's again going to come back to the individual LGA and what that looks like. So for example, if the block is between 600 and 800 meters squared in some LGAs, we're looking at 120 meters squared joule occupancy. If we're on that 800, um, 800 plus block, we're looking at 140, 150 meters squared joule occupancy build. It's important to note that we obviously between that 600 and 800 meters squared, we can build 120 meter squared joule occupancy, which is a similar size to that of a granny flat and that 120 meter squared granny flat. If you have the option and you're restricted to the size, a dual occupancy is always going to be more beneficial because you get that equity uplift with the option to strata title those. A lot of what we target can implement that 140, 150 meters square dual occupancy, but there's also blocks we're targeting that are that three-bed, two bath to granny flat. Now, in some other areas for our dual occupancy strategy, we can be looking at a 700 meter square plus block. And that is going to be the roughly three-bed, two-bath, two-garage, 120 meters square dual occupancy. So the site setbacks for a dual occupancy can be quite similar with some of those builds. However, there's a couple of other requirements that we need to factor in as well. So it's still going to be approximately 1.5 meters from our rear and side boundaries with our 1.2 meters of additional space for any infrastructure such as our stormwater or sewer. It also needs to be 1.8 meters from any existing dwellings. And we also have to factor 6 meters from any road boundaries. They are the requirements for a dual occupancy and the approximate, the approximate dimensions that we need to be factoring in. So you can see there just the requirements from a land size component of the differences between a Grenny flat and with a dual occupancy. We can then also see just the benefits and the upside potential for each of those. The Grenny flat and that secondary dwelling, we're creating this strategy for a yield uplift. We can then go and rent those properties separately with separate tenants in place, and they will be separately meted for electricity and water also. Opposed to our dual occupancy strategy, where we're adding that secondary dwelling. However, we have the option to be able to strat a title and separate those. They can be sold in the future. And this is where strategy comes into it as well, because some of our clients are going to complete this and hold long-term both properties. And then they might enter a debt reduction phase where they sell off the existing dwelling, they maintain the newer dwelling with higher depreciation benefits, and then they can reduce some debt. Some people would do this more short term. They'll build in that six, 12 month period, and then they will sell that existing dwelling at the front, reduce debt straight off the back, and that new dual occupancy dwelling is actually washing its own face because that$450,000,$500,000 build is generating about$650 per week. So it can be positive cash flow from day one, and it really helps within the portfolio. This is just where we get super, super in-depth with the strategy, what our clients are trying to achieve, and how we can implement that, and what sort of time timelines we're looking for. I hope this episode's been valuable on the difference between a granny flat and with a dual occupancy. They are all secondary dwellings. However, the meaning and what you can do with each of those secondary dwellings is different and is going to be meaningfully different in your property portfolio. If you've got a property in your portfolio and you're not sure whether you can do something like this on it, reach out, let us know. We can take a look and see if we can point you in the right direction to speak with someone, or we can help take a look at that for you. If this is something you're looking to implement in your property portfolio where you can purchase a property that has that secondary dwelling opportunity, you want to get in and you want to create a yield through the Granny Flat strategy, or you want to create yield and equity through our dual occupancy strategy, reach out and we can have a chat and see if our values align, see if you're in the position where you can implement one of these strategies. I hope you've enjoyed this episode and we will see you on the next one. Thanks for listening.