What is a granny flat? Definition & criteria

According to § 11 of the German Housing Act, a granny flat is defined as such if the flat is located in an owner-occupied house and if it is of subordinate importance compared to the main flat. If this subordination does not apply, this is referred to as a two-family house. Even if the granny annexe has to play a subordinate role in the house, the rule applies that the criterion of autonomous running of the household must necessarily be met. If this does not apply, one does not speak of a granny annexe, but of a room rental.

A large and decisive role in the definition plays the apartment access. The apartment access of a granny flat must not be accessible from the outside. The only access to the apartment may be via the staircase or a vestibule. Architecturally, the granny flat is usually located in the attic or basement of the house. Optionally, furnished or unfurnished apartments are offered for rent. This additional payment for furniture can be made as a one-time deduction or included in the rent on a monthly basis. Domestic duties must also be stipulated in the contract, including, for example, participation in garden maintenance or winter service.

Are you looking for a suitable apartment – whether as a tenant or investor? Then take a look at our guide to apartment types A-Z!

Room layout and use: office, hobby room or subletting

Apart from the condition that independent household management is possible in the granny annexe, there are no specific requirements or provisions for the room layout. The size and number of rooms is flexible and individual in each granny flat. The only requirement is the total minimum of 25 square meters. Depending on the agreement between landlord and tenant, the outdoor areas such as garden and terrace can be shared.

Self-employed people can use the rooms in the granny flat as an office or workshop. This way, the workplace is located in one’s own house and yet separated from the living area.

Other possible uses of a granny flat include using the premises as accommodation for guests or using them as premises for hobbies and leisure. Fitness rooms, wellness paradises or hobby workshops are popular possibilities.

Advantages and disadvantages granny flat: price, privacy & cancellation

For both parties, as tenant and landlord, a granny flat brings with it many different advantages and disadvantages. When living together with another household, clear rules must be established and taken into account. In the following two sections we point out various pros and cons of this type of apartment.

Pros: Low price, high retail value & social contacts.

Living in or owning a granny flat brings with it a great number of benefits for both parties. The owners of the house benefit in that money can be made from the otherwise unused space. The extra earnings can be saved and used as retirement savings. This housing option is particularly popular with a multi-generational household. Although the children do not have to move out of the parental home, they are given a great deal of privacy by the granny flat and can live independently.

Higher income can be achieved if the entire house is rented out instead of the apartment and the granny annexe is occupied by the owner. A granny flat also increases the value of the house when it is sold. A granny flat can also offer tax advantages. A reduction in the tax burden and deductible costs are also among the positive aspects.

Apartment hunters find a granny flat to be a cost-effective alternative to a conventional one- or two-bedroom apartment.

• Low rental price
• Only consideration for a neighbor
• Mostly shared use of garden
• Often already furnished
• Social contact & neighbourhood help
• Additional income for the landlord
• House has higher sales value
• Ideal for several generations living together
• Costs can be deducted from tax if applicable

Disadvantages: Lack of privacy, notice period & co.

The biggest disadvantage of a granny flat is the restriction of the privacy of both parties. Both the occupant of the granny annexe and the occupant of the house lose privacy because the entrance to the granny annexe is located in the house and the occupant of the house has to cross the living quarters of the granny annexe each time he or she enters or leaves the house.

It can be problematic for landlords, since a granny annexe has an extended notice period. This can be particularly difficult if there are problems with the tenants or delays in payment.

• Limited privacy for both parties
• Extended notice period
• If necessary, smaller size than normal apartment
• Participation in garden maintenance and winter service
• Good relationship with the counterparty is an advantage

Rentals & Tenants: Suitable for families, students & single people

Due to the many advantages, granny flats are attractive for many target groups. Especially families of several generations find a granny flat a perfect solution for living together under one roof. Several generations can live under the same roof, but the separate granny flat provides privacy within a household with its separation. Professionals who work privately in a household such as carers or au pairs will find this type of apartment an attractive solution. This would save the commute to work if the employer lives in the same house.

Single professionals: low rent & neighbourhood help

Single people can benefit especially from the lower rent. Young working adults should not be put off by living with another household, but should use this as an opportunity to make social contacts and benefit from communal evenings and neighbourly help.

Students & Trainees: Alternative to WG room & student dormitory

As an alternative to a shared room or a room in a student residence, a granny flat is an option for many students and trainees. Cheaper than an apartment and a greater degree of privacy than in a shared room. Due to the location in the attic or basement, the young adults can retreat to study and enjoy enough free space.

Families of several generations: enough space for several relatives

Families can settle down perfectly in a detached house with a granny annexe. Several generations of a family can live together under one roof and still have possibilities to retreat through the separate apartment. Adult children or grandparents can find a place of privacy and retreat in the granny flat. Another solution for several generations in one house would be a basement apartment. This is located in the basement rooms and is ideal for young adults or even seniors.

What you should consider before buying/renting a granny flat

Before entering into a tenancy for a granny flat, both as tenant and landlord, some important points should be clarified with the other party.

One of these important points are the vulnerable operating costs. It should be noted here that these are only charged as a percentage of the living space. The better alternative would be to integrate a separate water meter as well as gas and electricity meters. Additional costs incurred by repairs carried out by tradesmen are also divided between the two parties. In some cases, there are also additional monthly costs for the landlord’s furniture.

A granny flat in a new development is particularly attractive for purchase. A large number of builders who need capital to finance their own house turn their basement into a basement granny flat and offer it for sale. The purchase price of this is usually in the low price segment and is significantly cheaper than a normal apartment. It is therefore also suitable as an investment for life in advanced age.

• Operating costs incurred
• Additional costs for a furnished apartment
• Purchase recommendation for granny annexe in new development area

Tip. Read more about buying and renting an apartmenthere

Viewing appointment: Questions, photos, appearance – checklist

A sympathetic appearance and a friendly first impression are particularly important in the case of a granny flat, as you have to live under the same roof as the landlord. Accordingly, you should make a special effort to maintain a well-groomed appearance, a confident presence and good preparation at the viewing appointment. Already in advance, emerging questions should be considered and noted, so that in the end no important point is omitted.

Any personal documents such as identity cards as well as proof of income should also be brought along without being asked. All usable premises should be viewed and best documented by means of photos.

• Sympathetic & professional appearance
• Any important questions & points should be noted down
• Bring personal documents
• Documentation through photos

Financing & Investment: Loans, Credits & Equity

The income from renting the granny flat can be used, for example, as financing for the newly built house. Loans from the KfW are granted per residential unit. Since a single-family house with a granny annexe is two residential units, two loans are granted here accordingly. If the house meets the energy standards for energy-efficient construction, a low-interest loan of up to €120,000 can be granted by the KfW.

• Real estate financing: loan types, interest rates, comparisons & Co.

Checklist for granny flat: rental period, operating costs and co.

Living in a granny flat brings some special points to the fore due to the immediate cohabitation, which must be taken into account. During the inspection of the apartment, relevant questions can be clarified directly with the landlord. During this personal meeting, it can also be determined whether a tenancy is even an option for both parties, since tenant and landlord live together in close quarters.

Here we point out the most important questions you should ask yourself before you sign the lease of the granny flat:

• Possible rental period?
• Square footage?
• Basement or attic?
• Access to the apartment?
• Furnishing the bathroom?
• Kitchen equipment?
• Premises to be used?
• Separate water meter, gas meter and electricity meter?
• Sufficient sound insulation?
• Relationship with the landlord?
• Furnished or unfurnished?
• Contractual domestic duties such as participation in gardening and winter maintenance?
• Shared use of household appliances and outdoor areas?

Tips & tricks: sale, rental agreement, financing, taxes & Co.

There is more to buying, selling or renting a property than just raising the purchase price. Selection, valuation, purchase, processing, costs and so many more topics come up. Here you will find a selection of useful information and further articles on the topics of rental/purchase agreements, taxes and the purchase of real estate. Avoid typical mistakes of buyers and sellers with these tips and become successful with your property!

Review Purchase Agreement: Terms & Hidden Costs

In the lease or purchase agreement, all general conditions and terms are stipulated, which both party partners must adhere to in the purchase process.

An important point that must be recorded in the contract is the participation in domestic communal duties. This includes, among other things, participation in garden maintenance and winter service. All costs incurred, including additional costs, the charging of operating costs as well as costs that are added for the furniture of a furnished granny flat. Read more about buying an apartment in this article:

• Buy apartment

Save taxes with a granny flat

In order to be able to save tax on a granny annexe, the subordination to the owner-occupied home must be clearly recognisable, because the tax advantages in German tax law only apply if it is not a two-family house.

If costs are incurred in the construction of the granny annexe that can clearly only be attributed to the granny annexe, these costs can be deducted from the tax. An example of this is the installation of a kitchen. A reduction in the tax burden can be achieved, but the condition for this is that the rental income is also taxed.

• Save taxes with real estate

Buying Land: Builders, Search, Costs & Conditions

Before it comes to the construction of the house, many builders are first of all before the purchase of a suitable plot of land. If the intention is to buy a plot of land for the construction of a new house, interested parties should make sure that this is really building land and that this is released for building. Various chapters and important information on the purchase of land can be found in the following article:

• Buy land

Avoid Mistakes: This is What you Have to Consider

Finding the right property often proves to be more difficult than expected. Especially in big cities there is a real battle for the best properties in inner city locations.

In order not to make any mistakes that in retrospect have become your downfall, there are a few things to consider. From the important first impression at the viewing appointment, to the good organization of all documents. So that you don’t forget anything, and can move into your dream property soon, here are the 11 most important tips.

The First Impression Must be Right

No matter whether you have a single viewing appointment with the landlord or agent, or whether you view the apartment with further applications, the first impression must be right! But this requires more than a broad smile and a firm handshake.

Your appearance should appear neat and professional. No jogging pants, no T-shirt with food leftovers. You don’t have to wear a suit either, but a well-groomed appearance will make you look immediately likeable and take you one lap further down the list.

In addition, they should always appear friendly, but also determined. Insecurity can quickly be misinterpreted. Therefore, be clear beforehand what you want and appear confident but natural. Probably the most important thing at an inspection appointment is that you arrive punctually at the appointment at all costs. This shows that you are reliable and well organized. This is a big plus point that you can collect right at the beginning.

Good organization is, as so often in life, the be-all and end-all of an inspection appointment. You should be well prepared and, above all, have all the necessary documents at hand. This is a one-time organizational effort, because once you have collected everything together, you can reuse the documents for each viewing appointment.

Documents: Checklist

To these documents, there is a lot to it, for example:

1. Identity card
2. Self-assessment
3. Income statements
4. Employment contract
5. Certificate of the previous landlord’s freedom from rent debt
6. Schufa assessment
7. Possible references of the previous landlord
8. Possible rent guarantee (in case of insufficient income)
9. Eventual curriculum vitae (required in a few cases)

Self-Assessment, Schufa and Sympathy Points

To give the self-disclosure directly at the inspection date provides a good impression and a relationship of trust with the landlord. It is usually requested only later, to seize it beforehand does not harm however, but shows its commitment.

Also the Schufa self-disclosure is not demanded, but shows openness on its part and saves the landlord work. In general, the documents requested for the inspection date are communicated in advance. If this is not the case and you still turn up with a complete folder full of documents, this may give you an advantage over other applicants and sympathy points.

Know What You are Looking For

Usually you go directly to an apartment search, looking for a certain number of rooms or a number of square meters. However, before the viewing appointment, you should think carefully about what you really want and above all what you really need.

You should be clear about how many rooms you need, the approximate size of each room, on which floor the apartment should be, what you expect from the kitchen and bathroom, whether you want a balcony or a garden, whether the apartment must be suitable for pets and how much you can plan for renovation work. Of course, you should also be clear about the budget and how much the additional costs per month can be.

You should always remember your needs during the appointment, because you will soon lose yourself in dreams of a great, big apartment, which you don’t really need and can’t afford. Try to think practically and rationally and not to be distracted from your search.

Do not be afraid to ask questions during a viewing appointment. If you ask the right questions and thus show serious interest in the property, the landlord or agent will be better remembered as a potential tenant.

Interest is completely normal in the search for the dream property and this should be shown calmly. It is important to ask the right questions, which are also related to the property and thus to be able to better assess whether the object fits his ideas.

Questions During the Inspection: Checklist

Some of the questions that come in handy at every visit are

• What is the equipment / condition of the apartment? ( fitted kitchens, renovations, etc. … )
• What does the rental property include? ( cellar, garden, parking space, … )
• Are pets allowed, if so which ones?
• Who lives in the neighbourhood and what are the conditions there?
• How much are the additional costs and are they already included in the warm rent?
• Are there any shopping facilities / transport connections in the vicinity?
• What are my duties as a tenant? (cleaning the staircase, shovelling snow, taking out the garbage cans, … )

All these questions, show a serious interest in the property on your part and also help you to assess whether the property is really the right one for you.

Never go to a Viewing Alone

Whether it is an individual appointment or a group appointment, you should never go to an apartment viewing alone, even if you are looking for an object just for yourself. This has different reasons. Firstly, you have a second opinion, from a friend or family member, who can tell you again from a different perspective and as an outsider whether the apartment is really the right one. In addition, four eyes always see more than two, and your companion will notice defects or mistakes that you would not have discovered yourself.

If you are not looking for a property just for yourself, it is a good idea to bring the people who are moving in with you to view it, so that the landlord or agent can get to know everyone who would move into the property and so that they can also discuss with the other tenants whether the property is the right one.

Check the condition of the property

Deciding to buy a new property is a big decision that you should not rush into. Even if the apartment completely suits you at the viewing appointment, you should still sleep on it for one night to be able to think about it in peace.

It helps if you take pictures of the apartment at the viewing appointment, as a small reminder and to be able to look at the apartment again from your perspective, but also to show it to friends or relatives and to be able to obtain further opinions. Take the opportunity to take a close look at the apartment and look for small things that might be damaged or broken.

Defects: Checklist

• Is there modern wiring and enough sockets?
• What is the condition of the windows and doors? Can they be opened and closed easily? How do the seals look like?
• Where is the washing machine connection?
• Are there any mildew stains or wet spots?
• Is there a draught somewhere in the apartment?
• Are the exterior walls well insulated?
• What kind of heating is used?
• Is the apartment well-listened?
• Where is the TV connection and which one is available?

Take a Close look at the Surroundings

The environment and the location of the apartment is also a decisive criterion. First you should check if there are enough shopping facilities within walking distance, how the transport connections are and if there are schools, for example. This can be easily found out by taking a short walk through the neighborhood after the viewing appointment and taking a closer look at the surroundings. You should also check whether the surroundings might disturb you in your idyllic living.

• Is the apartment on a busy street and could the noise disturb you?
• Is the bedroom window facing to a street?

Even thin walls and loud neighbors could become a problem. If you are seriously considering the property, consider whether you really have everything to live in the area

Attend Viewing Appointments During the Day

A viewing appointment should always be made during daylight. This not only allows you to see and judge the apartment better, but you will also recognize blemishes much better in daylight than in the evening. It is also important to be able to judge how much daylight enters the rooms, where the sun comes from and when it shines in which room.

There should be enough windows to ensure daylight illumination during the day. Viewing appointments that are made in the evening are often not very professional, because good real estate agents know that you should see an apartment in daylight. So try to avoid such viewing appointments.

Convince the landlord / Broker of Yourself

If the apartment is right for you, all you have to do now is convince the landlord of your suitability. You can achieve this not only through a perfect first impression, good organization and the right questions, but also through little things that play into the landlord’s hands.

This can be that the desired moving in date fits exactly to your ideas, that you have possibly handicraft skills with which you can help with the renovation and perhaps even save a month’s rent or even small ideas with which you can accommodate the landlord.
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Be positive and always put yourself in the position of the landlord and ask yourself ‘ What would I expect from my future tenant instead of the landlord?’. Fulfill these expectations and the apartment is as good as yours!

During an inspection appointment not only you ask the questions, because if the landlord is really interested in you, a small interrogation is waiting for you, too, for which you should be prepared. Therefore, be prepared for questions concerning your financial situation and your professional activities.

The landlord naturally wants to make sure that you can pay the rent on time!

Therefore, if such questions reach you, don’t digress too much and explain precisely and to the point what you do for a living or what your financial situation might look like now and in the future. You should also be prepared for personal questions, such as the desire to have children or the like.

In any case, answer them honestly but do not digress too far. Your landlord would like to be able to assess you and not learn your entire life story. So be careful and think of good and precise answers beforehand.

The Right Farewell

Also the farewell at an inspection appointment should be well thought out. If you are seriously interested in the apartment, you should emphasize this clearly when saying goodbye.

If you notice already at the inspection that the apartment simply does not fit, you should be fair and tell the real estate agent or landlord so that you do not spoil anybody else’s chances.

Also clarify clearly if and when the landlord or agent will contact you. If you still receive a rejection, don’t be offended but ask the landlord or agent politely if they have a similar apartment on offer that is vacant or will be soon. This way you will keep the contact positive and maybe you will find your dream property this way.