Granny flat
rental yield.
Granny flat rental yield is the annual rent divided by the build cost. For a Haven in Baldivis at $238,268 home plus siteworks, let at $430 a week, the gross yield is about 9.4% on the build cost. That is illustrative general information, not a forecast or advice, and it excludes land.
Last updated June 2026. All yield figures are illustrative, exclude land and holding costs, and are not financial advice.
Gross yield equals annual rent divided by cost. Net yield subtracts running costs. For a granny flat you measure rent against the build cost, design base price plus siteworks, and add land only when you do not already own the block.
- Annual rent. Weekly rent multiplied by 52. A property manager can give you a realistic figure for your suburb and finish.
- Build cost. The design base price plus your suburb siteworks. On a backyard build, land is already owned, so it is excluded.
- Gross yield. Annual rent divided by build cost, as a percentage.
- Net yield. Subtract rates, insurance, management, maintenance and vacancy from the rent before dividing. This is the honest number.
The same Haven design lands at a different total in each suburb because siteworks differ, which moves the yield. The rows below pair real siteworks with a representative rent for each corridor. The rent assumptions are illustrative.
| Suburb | Home + siteworks | Rent/week | Annual rent | Gross yield |
|---|---|---|---|---|
| Baldivis | $238,268 | $430 | $22,360 | 9.4% |
| Wellard | $238,416 | $440 | $22,880 | 9.6% |
| Gosnells | $242,718 | $420 | $21,840 | 9.0% |
| Byford | $247,701 | $430 | $22,360 | 9.0% |
Notice the yield barely moves between corridors. That is the point. Because the build cost dominates and land is excluded on a backyard build, a granny flat returns a similar strong gross figure across most Perth growth suburbs. The variable that matters most is the rent your property manager can actually achieve.
Gross yield ignores running costs. A real net yield subtracts rates, insurance, property management, maintenance and vacancy from the rent. For a clear-eyed decision, model the net figure and include land and finance if you are buying the block, not just building on one you own.
| Item | Effect on yield |
|---|---|
| Land cost (if buying) | Lowers yield, often substantially |
| Property management | Typically a percentage of rent collected |
| Rates, water, insurance | Fixed annual deductions from rent |
| Vacancy | Lost weeks reduce the annual rent |
| Maintenance | Ongoing, lower on a new build early on |
| Depreciation | A tax benefit, strong on a new build, not a cash yield |
A new granny flat does carry one offsetting advantage the table hints at: depreciation. A brand-new building and its fixtures can be depreciated against income, improving the after-tax position even though it is not part of the cash yield. The granny flat investment page covers depreciation and the full case.
This is general information only and does not take into account your objectives, financial situation or needs. It is not credit assistance or a credit quote. Consider whether it is right for you and seek advice. Finance is arranged through Central Lending Solutions, the licensed credit partner The Property Plug works with (Australian Credit Licence or credit representative number [TBC]).
The yield figures on this page are illustrative general information only. They are calculated on the build cost and exclude land, stamp duty, finance, vacancy and running costs. They are not a forecast, a valuation, or financial or credit advice. Confirm achievable rent with a local property manager and your own position with a qualified adviser before you commit.
How is granny flat rental yield calculated?
Gross rental yield is the annual rent divided by the cost, as a percentage. For a granny flat, divide the weekly rent times 52 by your build cost (design base price plus siteworks). Net yield then subtracts rates, insurance, management and maintenance. Land cost is added when you do not already own the block.
What is a good rental yield for a granny flat in Perth?
On a backyard build where land is already owned, a granny flat can show a strong gross yield on the build cost because rent sits against a modest construction figure. The illustrative rows on this page land around 9% gross on the build cost. Treat these as illustrations, not forecasts.
Why is granny flat yield higher than a normal house?
Because almost the entire cost is the building, not the land. A standalone house carries a large land cost that dilutes yield. A backyard granny flat adds rent on land you already hold, so the rent is measured against a much smaller spend.
Does this include land and holding costs?
No. The worked figures are gross yield on the build cost only. They exclude land, stamp duty, finance, vacancy, management, rates, insurance and maintenance. A real net return is lower. Run your own numbers and seek advice before committing.
Run the numbers on your block
One request matches the full price list and a real siteworks figure for your suburb, so you can model your own yield. Free to you.