The Complete Guide to Secondary Dwellings: Granny Flats, Tiny Homes & More​

Last Updated: Oct 15/2023

Many people have looked out into their yard and have had the same thought – “Look at all that empty space that’s just going to waste”. If you’re one of those people that’s had the thought of adding an extension or a secondary dwelling but were turned off because you didn’t really know where to start, here’s some good news.

There are manufacturers that specialize in creating small housing units that can be easily designed to fit the exact specifications of the client. Meaning, these dwellings are built from the ground up to cater to very specific needs.

If you’re looking for a secondary dwelling for your property and are willing to hear us out when it comes to what we have to say about tiny homes, granny flats, and shipping container homes, then we believe you’ll see that small packages can indeed provide large benefits.

Table of Contents

Tiny Homes

According to the Australian Tiny House Association (ATHA): “Tiny houses are moveable dwellings up to 50m2 that are suitable for residential use. Tiny houses can be largely grouped into 2 categories: on wheels or on skids.”


Tiny homes can be as expensive or as cheap as you want. The price can range from between $50,000 – $100,000 and over, but even that’s not certain since it will vary from company to company. But that still means that even the higher-end, more luxurious tiny homes can potentially be ten times cheaper than even the more affordable houses in Sydney.

The pre-made houses on wheels need to meet certain requirements in order to ensure that the outer shell that includes the roof, the siding, and the trailer is both road legal and safe to live in. These measures ensure that nothing on the exterior of your home breaks due to faulty design, while allowing you to select whichever kind of interior you want.

Due to the trailer, the tiny houses don’t require permanent service connections or structural support and are easy to relocate. Additionally, the smaller house size automatically leads to smaller bills and a much easier time keeping everything on the inside clean and in good nick.

A house on skits can be an excellent addition to your backyard if you constantly have friends or relatives over and don’t have a guest room in your main home where they can stay. You also have endless options when it comes to how you can expand it in small ways. For example, you can extend the eaves to give it a bit more shade, add a patio that goes from one house to the other, and so on.


Tiny houses on skids are considered to be a permanent residence, and as such must adhere to the same regulations as any other standard-sized house. Most states have minimum building requirements that prevent people from building nothing other than a tiny home on their property, meaning that these units can only be added as an accessory dwelling unit (ADU).

However, even then they’ll need to be expanded in order to meet the minimum requirements, and the fact that the property needs to be enlarged defeats the purpose of buying a tiny house in the first place. Not to mention that you’re going to need to hire contractors to do the extensions for you in order to make sure that you’re adhering to all of the proper building codes, which means that the cost of the tiny home will go up.

Since a property that’s placed on a trailer on wheels is considered to be a recreational vehicle rather than a house, it’s allowed to be parked on your property. However, keep in mind that if you decide to take it somewhere, some publicly available parking spaces may have certain restrictions when it comes to an RV of that size, considering how much space they can take up.

Additionally, while you are allowed to have the tiny home on your property for as long as you want, there are restrictions when it comes to how long you can exclusively live in something that is classified as a recreational vehicle.

Granny flats

A granny flat is a stand-alone dwelling that’s built next to a larger house and is designed to have enough space in order for one to two people to live comfortably. The name refers to the fact that these sorts of living areas are commonly built as a solution to the problem of wanting to have an aging relative live close to their family, but not having enough space in the main house to accommodate them.


Granny flats are essentially mini houses, meaning that they contain all of the same facilities and can provide you with the same amenities. Add some foldable furniture in order to alleviate some of the space issues, and you won’t even notice any differences between a granny flat and a regular-sized house. Well, except for when it comes to the bills, since they will naturally be lower than your main family home.

Most companies will offer a wide variety of different granny flats that you can choose from. This will allow you to make sure that the one you get is a perfect fit for your needs as well as your backyard. The more luxuriously decorated models are always tempting, but the more basic ones are far cheaper and will still provide you with everything you need to live comfortably.

If your block is over 450 square metres, then you should be able to put a granny flat on your property. That’s unfortunately not all, since there will also be other regulations to adhere to, so your best bet is to leave it to the professionals. Luckily, there are plenty of good manufacturers to choose from that’ll take care of everything for you.

If you find that you’re not using your granny flat as much as you thought you would, renting it out would be a good way to keep it from just collecting dust while also earning some additional cash from the rental fees. Since they are easy to refurbish and maintain, you really shouldn’t have any problems when it comes to getting it ready for potential tenants.


While movement and living space won’t be an issue, storage space will. The easiest solution would be to take all of the items that you don’t have room for in the flat and simply put them in your main house. This is only a temporary solution though, since after you run out of space in your family home, you’ll find out that clutter may be an issue in the granny flat.

These units will have a much longer design and building process than the tiny homes or shipping container dwellings. The building process itself will be time-consuming, but there will also be certain permits that will need to be obtained, which will take up quite a bit of time as well.

These units will also be more expensive to build and maintain in comparison to tiny homes or shipping container dwellings. The tiny homes and shipping container dwellings can get away with certain things due to gray areas when it comes to their building requirements. However,  because a granny flat is the closest to a traditional home it can enjoy no such loopholes and must adhere to strict building requirements and upkeep standards. Consequently, you should be prepared to spend at least $100,000 or more, depending on the size of the dwelling.

Shipping container dwellings

Shipping containers can serve as great backyard additions to your primary house and can be used as anything from an outdoor kitchen to a home office. Their simple design makes them easy to modify in any way you see fit.


Actually getting your hands on a shipping container that you can modify is going to be easier than trying to actually turn it into a comfortable dwelling. Not only are they easy to find, but they’re also very easy to get back to your property since they are specifically designed to be transported without any effort and will fit on the back of any standard truck.

Containers can cost anywhere between $1500 to $5000, not including shipping costs. But their real value comes into play when the time comes to remodel them as you don’t really need to hire a contractor in order to ensure that you’re fulfilling all of the proper building permits. 

Since containers have an already available frame that you can work with, you don’t need to build anything other than the foundation and can simply call in a company to cut and install a few windows and put in new doors. As long as you have all the necessary consent forms of course.

Aside from the benefits of not having to pay for additional construction costs, which can be steep, the maintenance costs and basic amenities bills are going to be very low due to the compact size of the dwelling.

The speed at which you can have the shipping container on your property and converted into an actual dwelling is staggering, especially if you compare it to the speed of building a granny flat or waiting for a tiny home on wheels to arrive. The difference is so vast that by the time the foundation for both of the previous examples has been built, you’ll already have spent a comfortable weekend in your newly furbished shipping container dwelling.


It is possible to extend the size of your container dwelling by attaching new additions to the sides. However, you’re going to need to spend a lot of money on hiring an engineer, on insulation costs, labour costs, and actually buying additional containers in order to connect them and meet the necessary building regulations.

Additionally, the materials that shipping containers are made out of aren’t ideal for large scale constructions. In order to fuse multiple cargo containers into a stable frame for the house, you’re going to need to reinforce the sides, the frames, the bases, and all of the connecting points. Needless to say, that won’t be cheap.

Reusing old shipping containers as dwellings is considered to be a very “green”, eco-friendly alternative to building a house from scratch. However, if you do decide to use an old container instead of a new one, you’ll need to make sure you extensively check for structural flaws or signs of corrosion. Also, since containers don’t exactly have a service history, you might want to thoroughly clean it after purchase, since you have no idea what the previous cargo could have been.

While shipping container dwellings are easy and quick to construct, their applications are limited. But as long as you work in the bounds of those limitations instead of trying to work around them, you’ll find that they can prove to be a pretty good cost-effective secondary dwelling.

List of Tiny Home and Granny Flat Manufacturers in Australia by State

If this article has helped convince you that any of these secondary dwellings might be a good choice for you, then you might also be wondering where to find manufacturers in your area that can provide you with more information about the sorts of houses that they offer. In order to send you in the right direction, we’ve included a list of manufacturers that you can look up in order to get started.