Should You Build ADU Housing on Your Property?
If you’re a homeowner in the market to maximize space, boost property value, or create a new income stream, ADU housing (aka an accessory dwelling unit) might be just the solution you’ve been looking for.
But before you call your contractor, let’s break down what accessory dwelling units actually are — and whether building one makes sense for you.
What Is an ADU, Exactly?
An ADU, or accessory dwelling unit, is a smaller, self-contained home that sits on the same lot as a single-family residence. Think: backyard cottages, carriage houses, and garage or basement apartments with their own functional kitchen and bathroom.
In everyday speak, they go by many names — granny flats, in-law suites, casitas — but the idea is the same: a livable, independent space that shares land with your main home.
How to Build an Accessory Dwelling Unit
Building an ADU means more than throwing up a tiny house in your backyard. Here’s a simplified look at the process, broken down:
- Check Local Zoning Laws: Every city has its own rules about ADU housing. Some are ADU-friendly. Others? Not so much.
- Design with Purpose: Decide whether it’s for family, guests, rental income, or resale value.
- Secure Permits: Get the green light from your city before construction begins.
- Hire the Right Team: Work with contractors or architects who understand ADU-specific code requirements.
- Consider Utilities + Access: Factor in plumbing, electric, privacy, and separate entrances.
Pro Tip: If you’re buying a home and thinking about adding an ADU, make sure to inspect for space, access, and legal feasibility before closing in the first place.
Thinking about making a few home upgrades? Explore these related blogs!
- How to Preserve Character With a Historic Home Renovation
- How Much Value Does An In-Law Suite Add To Your Home?
- Should You Renovate Or Sell?
How Much Does an Accessory Dwelling Unit Cost?
The cost can vary widely depending on size, materials, and whether you’re converting an existing structure or building new. A general ballpark:
- Garage Conversion ADU: $60,000 – $120,000
- Detached New-Build ADU: $150,000 – $300,000+
- Basement/Interior Conversion: $40,000 – $100,000
While the upfront investment can be steep, the long-term ROI may be worth it — especially if you’re ultimately planning to rent out the space and add to your monthly income.
Pros of ADU Housing
- Rental Income: Offset your mortgage with long-term or short-term tenants.
- Multigenerational Living: Give aging parents or grown kids their own space.
- Increased Property Value: Homes with well-built ADUs tend to fetch a higher sale price.
- Flexible Space: Great for guests, a home office, or future downsizing.
Cons to Consider
- Upfront Cost: Construction, permits, and utility tie-ins can add up quickly.
- Zoning Hurdles: Some cities make the approval process unnecessarily complex or slow.
- Maintenance: You are essentially managing a second living space, after all!
- Privacy Concerns: Since you’ll be sharing your land — and possibly your driveway.
Have more questions about buying a home? Check out these blogs next!
Buying or Selling a Home With an ADU
Buying a home with an ADU? Be sure to look into local regulations to confirm it’s legal and permitted first.
Selling a home with an ADU? Highlight the value: rental potential with built-in flexibility, and privacy. As you might have imagined, a fully permitted, turnkey ADU is a major selling point.
Final Thoughts: Is ADU Housing Right for You?
ADU housing is more than just a trend — it’s a practical way to maximize your property and create flexible space that grows with you. Whether you’re looking to invest, host, or house a loved one, an ADU could be your property’s next big move…that is, as long as you do your homework, budget wisely, and talk to a real estate professional who understands how to help you leverage its value.
Want help buying or selling a home with an ADU or figuring out if your property is ADU-ready? Let’s chat. Give us a call at 202.280.2060 or email us directly at js****@*******ra.com.
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