UPDATE: Neighbours used garden hoses in a frantic attempt to stop a fire that destroyed a rented Mooloolaba property.
The fire began in the bunk bed of a four-year-old boy around 7am and quickly spread to the ceiling and the rest of the building.
Neighbour Matt Brown awoke to the sounds of thumping on his front door, grabbed his garden hose and ran to the burning house.
"We went inside and just tried to put it out but it was already pretty big," Mr Brown said.
"The flames were all over a bunk bed, so we tried to put it out and wet everything around it to contain it.
"But by then it was too big, the roof was on fire so we said 'get out'."
The home was occupied by a woman, her daughter, grandson and her daughter's boyfriend.
Snr Sgt Peter McKenzie, of the Sunshine Coast police, said there were no suspicious circumstances.
"The female occupant just smelled smoke and the smoke alarm went - thank God for smoke alarms - and she found the bed of the four-year-old child on fire," he said.
"She grabbed the child and told the others, and they all left.
"All the occupants are pretty lucky (thanks to) some quick thinking by the grandmother. If it would have been earlier in the morning or late at night, they wouldn't have smelled the smoke, but they would have heard the alarm.
"All their possessions have been lost, all inside has been totally destroyed, but they're all safe, they're all well, no injuries, that's the main thing."
It's believed the family's belongings were not insured.
Neighbours managed to save the family's car, which was locked in the garage.
Mr Brown said he ran to the house of neighbour Hannah Cooper, just metres from the ferocious orange flames.
"When I was knocking on her door, I could see flames out the windows, I could hear glass breaking."
Firefighters praised the family and home owner for having working smoke alarms.
"If you have working smoke alarms, if you're asleep in bed, smoke alarms will save lives," North Coast Region Duty Manager David Weeks said.