What drives the cost of a granny flat.

Most of the cost of any home sits in the rooms that are full of services and in the structure that has to be there whatever the size. A granny flat has all of them and very little else. The kitchen, bathroom and laundry that a large house spreads across one corner make up a large share of a secondary dwelling, with their plumbing, drainage, waterproofing, tiling, cabinetry and appliances. The slab, the roof, the switchboard and the hot water system are needed in full however small the floor area. Spreading those fixed elements over a small footprint is what pushes the price per square metre up, and it is why a slightly larger flat often costs little more than a slightly smaller one.

The second large factor is getting the services there. The flat usually sits at the back of the block. Water, sewer or drainage, power and sometimes gas and data must run from the street or the main house to it, across the garden, under paths and around trees. The length of those runs, the depth the drainage needs and whether the existing connections have capacity for a second dwelling are decided by the block, and they are spent before the slab is poured. A long run to a deep sewer at the far corner is one of the dearest lines a granny flat can have.

Then comes the site itself. Access through a side passage limits machinery and deliveries. A sloping rear yard means retaining, cut and fill or a suspended floor. Trees close to the building footprint affect the footing design and may need protection or removal, with the approvals that go with that. The soil decides the slab and footings as it does for any home.

The form of the flat matters too. A simple rectangle under a skillion or gable roof is the most efficient shape to build. Every extra corner adds wall, framing and flashing; a complex roof adds junctions and time. Attached to the main house, a flat shares a wall but gains the join, with its demolition, beam and flashing; detached, it stands on its own and keeps the garden between.

Openings are a larger share of a small building than a big one: a glazed wall onto a courtyard is a fine idea and a priced product. And the finish level runs across every visible surface and fitting; in a small home the difference between levels is spent mostly in the kitchen and the bathroom.

Finally, the rules. Secondary dwellings are subject to planning and building requirements that change by state and council, including limits on size and position and what approvals are needed. They decide what you can build before cost comes into it.

On Modern GBQ a finish level, Economical, Standard, Good or Advanced, sets the default product on every line that needs one: flooring, wall and ceiling finishes, tiles, cabinetry and benchtops, tapware and sanitaryware, doors, hardware and lighting. Economical takes the plainest listed product that does the job; Standard the mid-range most homes are built with; Good a step up in material and brand; Advanced premium products and the labour some of them need.

For a granny flat the choice usually follows its purpose. A flat for a family member or for rent is often built at Standard, with the money that would have gone to Advanced finishes spent on a better-insulated, better-glazed building that costs less to run. A flat that will one day be the owners' own home is a different decision.

Every default can be swapped for a listed alternative, with a photo and a short reason recorded, and re-priced as a new version. The finish level never changes the service runs, the slab or the roof.

• Pricing it as a fraction of a house. A granny flat has all the fixed elements of a home and none of the cheap rooms, so a per-square-metre rate from the main house undercooks it.
• Forgetting the service runs. The trench from the street or the house to the back of the block is often the biggest surprise. Find out where the sewer is and how deep before you design.
• Assuming the existing connections can cope. A second dwelling may need the power supply, the drainage or the water service upgraded.
• Checking the rules last. Size limits, setbacks, approvals and whether the flat can be rented separately differ by state and council. Check them before anything is drawn.
• Designing a complicated shape. Every corner and roof junction costs more than the floor area it adds.
• Leaving out the outside. The path to the door, a deck, privacy fencing and lighting are part of making the flat a home.
• Comparing builders on different scopes. Approve one scope and have every builder price that, so the cheapest quote is not the one that left the drainage out.