Yeah there's a lot of add on costs like council contributions, design & approval fees, demolition of existing structures, landscape, air-con, clothesline, security doors and the list goes on.
A great one I recommend is a Peter Span book How to build a $10m property portfolio. It's very easy to understand and gives you the basic ideas regarding property investing so you can use to formulate your strategy. Combined with 'Rich dad poor dad' and you should be ok :)
Reading books are...
Don't know what you're on about. It's a great idea to buy and build a granny flat. You just need to find a property that is suitable for it. That particular example by the op is not great but it's better than alot of other people are doing.
I'm building a granny flat at the moment in Sydney...