Last reviewed: August 2026
A granny flat that rents easily and one that sits empty are usually the same building with different decisions made around it. Privacy, separate access, parking and metering matter more to a tenant than the finish of the benchtop, and all four are decided at design stage when they are cheap to get right.
Here is what to sort out before the slab goes down.
The four things tenants actually care about
1. Separate access
A tenant wants to come and go without walking past your kitchen window or through your living space.
The best arrangement is a separate gate and path from the street directly to the granny flat’s front door. Where the block does not allow that, a clearly defined path along the side of the house with its own gate is the next best thing.
Shared access through your main entry or through your private yard is the single biggest thing that reduces rental appeal.
2. Privacy in both directions
This matters to you as much as to the tenant.
| Design decision | Effect |
| Windows facing each other between dwellings | Poor privacy for both |
| Granny flat living area facing your bedroom | Noise complaints in both directions |
| Screening, fencing or planting between dwellings | Meaningfully improves both |
| Separate private outdoor space for the tenant | Strong appeal, reduces conflict |
| Orienting the granny flat away from the main house | The cheapest fix, decided on paper |
The SEPP already requires privacy screens in some situations, based on how high the floor level sits and how close the window is to a boundary. Meeting the minimum is not the same as designing for privacy.
3. Parking
If your suburb has tight street parking, a tenant with nowhere to park will keep looking.
Work out early whether both dwellings retain usable parking, and whether the tenant’s space is accessible without moving your car. Parking requirements on your land are set by the planning controls that apply, and the Housing SEPP treats the number of spaces on the site as a non-discretionary standard, so confirm the position for your block with your certifier.
4. Outdoor space
Even a small courtyard or paved area that belongs to the tenant makes a real difference, particularly for longer tenancies. A granny flat with no outdoor space of its own reads as temporary.
The practical setup decisions
Metering
How utilities are metered decides who pays for what and how much friction there is.
| Approach | How it works | Consideration |
| Separate meters | Tenant has their own account | Cleanest, costs more to install |
| Sub-metering | You meter their usage and on-charge | Rules apply to what you can recover |
| Included in rent | You pay, rent reflects it | Simplest, but usage is not your control |
Decide before construction. Retrofitting separate metering is far more expensive than installing it during the build.
What you can lawfully recover from a tenant for water and other utilities is governed by residential tenancy law, so check the current position with NSW Fair Trading or your property manager before setting the arrangement.
Storage
Small dwellings live or die on storage. A tenant with nowhere for a vacuum cleaner, a suitcase and a bike will feel cramped in a well designed 60m². Built-in wardrobes, a linen cupboard and some external storage are worth more to rentability than an upgraded splashback.
The things a rental legally needs
Beyond the building approval itself, a rented dwelling has obligations. These include smoke alarm requirements, and the minimum standards a residential premises must meet to be lawfully rented in NSW.
These are set by residential tenancy legislation and they change from time to time, so confirm the current requirements with NSW Fair Trading or a licensed property manager rather than relying on a general article.
Design decisions that cost nothing at plan stage
This is the point of doing this early.
| Decision | Cost if decided on paper | Cost if changed later |
| Which way the front door faces | Nothing | Significant |
| Where windows sit relative to the main house | Nothing | Significant |
| Separate gate and path | Small | Moderate |
| Rough-in for separate metering | Small | Large |
| Built-in storage | Small | Moderate |
| Private outdoor area | Small | Moderate |
Every one of these is free to change while it is a drawing.
Before you advertise
- Confirm you have your occupation certificate. An unapproved dwelling should not be rented.
- Talk to a local property manager about realistic rent and current vacancy in your suburb.
- Arrange landlord insurance, which is separate from your home insurance.
- Decide whether you are managing it yourself or using an agent.
- Understand your obligations as a landlord under NSW residential tenancy law.
- Have a written tenancy agreement, even if the tenant is someone you know.
That last one matters more than people expect, including with family. A written agreement protects both parties and removes the ambiguity that causes problems later.
Frequently asked questions
Can I rent my granny flat to anyone in NSW?
Yes. A secondary dwelling can be rented to any tenant, including people unrelated to your household. What you cannot do is subdivide it and sell it separately.
Do I need a separate electricity meter?
Not necessarily, but it is much cleaner if the tenant has their own account, and it removes arguments about usage. Decide before construction, because installing it during the build is far cheaper than retrofitting.
Can I charge the tenant for water?
There are rules about what a landlord can recover and under what conditions. Check the current requirements with NSW Fair Trading or your property manager before setting it up.
Do I need landlord insurance?
Your home and contents policy generally does not cover the risks that come with renting. Landlord insurance is a separate product and worth discussing with your insurer before a tenant moves in.
Should I use a property manager?
That depends on how much involvement you want and how close you live to the tenant. Managing a tenancy in your own backyard has an obvious convenience and an obvious awkwardness. A property manager creates a buffer, which some landlords value highly when the tenant is ten metres from their back door.
Design it to rent from the start
The decisions that make a granny flat easy to rent are made on the plans, not after the build. Access, privacy, parking and metering are all free to change while it is still a drawing.
Browse the floor plans, or call BlueGum on 1300 060 651 to talk through a layout that works for a tenant and for you.
BlueGum Granny Flats is a licensed NSW builder, licence number 247388C. This article is general information and is not legal, financial or tenancy advice. Residential tenancy obligations change from time to time. Confirm current requirements with NSW Fair Trading or a licensed property manager.
