Based on current Melbourne market data for a studio-style granny flat with unique character features in a middle-ring suburb.
| metric | projection | notes |
|---|---|---|
| Total investment (incl GST) | $110,000 | design + building permit + construction + handover, at $100,000 + GST. land already owned. |
| Estimated weekly rent | $480 - $580 | long-term lease. loft design commands premium over standard 1br. |
| Annual gross rent | $24,960 - $30,160 | 52 weeks at $480-580/wk. this is where every "yield" figure on this site stops. |
| Vacancy (2.5 weeks) | $1,200 - $1,450 | long-term residential letting. |
| Property management (8%) | $1,997 - $2,413 | standard melbourne management fee. |
| Letting fee (annualised) | $322 - $389 | one week's rent per tenancy, averaged over 18 months. |
| Landlord insurance | $500 | landlord policy plus increased building sum insured. |
| Council rates increase | $150 | same title — no separate rate notice. |
| Land tax | $900 | from 2026, the part of the land the second dwelling occupies is no longer exempt. |
| Repairs & maintenance | $700 | new build — low in the early years. |
| Safety compliance | $250 | smoke alarm check plus electrical and gas safety checks. |
| Water service charge | $300 | where tenant usage cannot be separately metered. |
| Tax return preparation | $200 | additional rental schedule. |
| Total operating costs | $6,518 - $7,251 | about 26% of gross rent. |
| Net operating income | $18,442 - $22,909 | gross rent less all operating costs above. excludes any loan interest. |
| Gross rental yield | 23% - 27% | on $110,000 incl GST. vs 3.2% for melbourne houses. |
| Net operating yield (before finance) | 17% - 21% | excludes finance costs. if you borrow to build, this figure falls — we do not publish a net figure after interest because it depends on your LVR, your rate and your structure. |
| Short-stay (airbnb) gross yield | 30% | $120-150/night at 70-80% occupancy. before platform fees, cleaning, laundry and management — those typically take 40-50% of gross short-stay revenue. |
| Property value uplift | +$60,000 - $80,000 | premium design = premium valuation. |
| Tax depreciation (annual) | $4,000 - $5,500 | Div 40 + Div 43 deductions. non-cash, so it improves the tax position without reducing cash flow. |
| Breakeven on investment | ~5 years | from net rental income alone, before interest. equity gain is immediate. |
Yield Three meets all Victorian 2026 requirements for Small Second Dwellings.
45.5sqm ≤ 60sqm → exempt under VIC law. Building permit only.
Exceeds 2026 energy efficiency standard. Pitched roof aids passive cooling.
Flush entry, accessible bathroom, wider doorways. Mandatory from 2026.
No natural gas connection. Safer, cleaner, future-proof.
Victorian Building Authority registered practitioner.
Termite-proof, non-combustible, 50-year structural guarantee.
The double-pitched roof and attic loft create a character home feel that standard flat-roof granny flats can't match. This model stands out on the rental market.
Unique design = higher nightly rates and better occupancy. On Airbnb, this model consistently outperforms standard granny flats. $130-180/night vs $100-140 for basic units.
The 13sqm attic loft adds flexible space without increasing the footprint. Use it as a second sleeping area, home office, or storage. More function for the same land.
The pitched roof and warm material palette sit beautifully in a backyard setting. Less "shed" feel, more "garden retreat" — which tenants and guests pay more for.
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