If you’ve got a generous backyard and you’re wondering how to make it work harder for you, you’ve likely landed on two main options: build a granny flat or subdivide your land.
Both options can increase your property’s value and generate income, but they suit different goals, budgets, and timelines. So which one makes more sense for your situation?
Let’s break it down.
🏡 Option 1: Build a Granny Flat
Granny flats are self-contained dwellings that sit on the same title as your main home. They’re ideal for people who:
- Want to generate passive rental income
- Need a separate space for extended family or adult children
- Have a tighter budget or limited time to manage a large-scale project
Advantages:
- Lower upfront costs – around $120K–$200K
- Faster build and approval compared to subdivisions
- Can add significant value to your property
- Great for multi-generational living
Things to Consider:
- Can’t be sold separately
- Size and placement are limited by local council regulations
- May require service connections and setback compliance
🏗️ Option 2: Subdivide Your Property
Subdivision involves legally splitting your land into two or more titles. Once approved, you can build a separate dwelling, sell the land, or retain both titles for future development.
This strategy suits owners looking for long-term capital growth or larger development potential.
Advantages:
- You create a separate, sellable title
- Potential for higher ROI with a second home build or land sale
- Greater flexibility over time (e.g., hold, build, or flip)
Things to Consider:
- Higher cost upfront
- More complex approval process with council and utilities
- Longer timelines and potential for delays
🔍 What’s Right for You?
| Your Goal | Best Option |
| Fast ROI, lower cost | Granny Flat |
| Long-term wealth building | Subdivision |
| Keep family close | Granny Flat |
| Flexibility to sell later | Subdivision |
| Rental income ASAP | Granny Flat |
If you’re not sure which direction to take, a professional Site Assessment can help. We’ll review your zoning, overlays, block size, and planning conditions to give you a clear recommendation based on your goals.
🎥 Still weighing it up? Watch our latest YouTube video on the benefits of granny flats and subdividing your backyard
📍 Servicing all of Victoria
📞 Call now or email us at info@isubdivide.com.au