As government has created policy to increase affordable housing stock, the average suburban family has alerted to the opportunity that a granny flat presents not only to their personal convenience, but to their wallet.

Home owners are now frequently becoming first-time investors by allocating part of their quarter-acre-block to a secondary dwelling and reaping the windfall.

In suburbs such as Argenton and Cardiff a two-bedroom granny flat can fetch as much as $370 per week in rent. If your family's needs change, it can convert back to your own use, whether for young adult children - to study or save for their own home - for aging parents' independent living, or just extra living space.

And for little more than $100,000 in construction costs the return on investment is also seeing professional investors change backyards across Newcastle.

So if you're thinking a granny flat could be a great idea, here are some essential details to consider.

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Granny flats are permitted to a maximum of 60 square metres in floor area. In comparison to our increasingly large houses this might sound impossible, but it is actually a comfortable limit to achieve two bedrooms with built-in robes, a decent sized open plan living area and sufficient bathroom space with a laundry closet.

By law a secondary dwelling must be fully self-contained, so it must have a full kitchen as well as laundry. Building codes require laundries to have a designated sink but with the space-saving products that are available today, this won't be a problem.

Whilst the footprint is restricted there are clever ways to increase the sense of space. Increased ceiling heights will give the impression of more space by creating a more voluminous, light and airy interior.

Add to this plenty of glazing (in the right places), perhaps even clerestory windows, and your granny flat suddenly has the appeal of a high-end build. Good architecture can increase the perceived value and therefore return on a dwelling.

Outdoor space will further add to the functionality and enjoyment of the granny flat. A decent-sized deck, integrated well, can appear to be an extension of the floorplan and as such create a greater sense of expanse.

Think your block size is too small? A granny flat is permissible on land as small as 450 square metres, but be aware there are distance requirements to not only the boundaries but to your house as well, so speak to a good planner or designer to make sure your block sizes up.

And if it does, a granny flat could soon enough be feeding the mortgage or keeping extended family close by.

- Paula Harwood, The Design Hub