How Much Value Does an ADU Add to My Property?

Accessory dwelling units (ADUs) are expansions, remodels or additional units on your property. You might be looking to add space to your home to accommodate your growing family, or you might be looking to create a passive income by renting out an additional unit.

Whatever your goals are, an ADU increases your property value with the potential for a return on investment (ROI). Discover how an ADU adds value, the different types of ADUs and whether you should consider getting an accessory dwelling unit of your own.

How Does Building an ADU Add Value to My Property?

Adding an ADU can make your property more desirable to potential buyers, and building an accessory dwelling unit can increase your property value by 25%-34%. The exact amount varies based on your home’s location, the size of your ADU and its features. There is the potential to increase your property value by over 50% if an ADU is added to a single-unit property.

With an ADU, you can raise your asking price if and when you decide to sell your home. You will bring new buyers to the table that you might not have had before who need additional space.

If you are planning on staying at your home for a while, or if it is your forever home, you can rent out your accessory dwelling unit to see a return on your investment.

If you rent out your ADU, you can collect monthly rent and start to see a return on the costs of construction. With more people flocking to cities for work and new opportunities, you may have a lot of interested renters. If you rent out your accessory dwelling unit long enough, you can surpass construction costs and start making a profit.

What Types of ADUs Add the Most Value to My Property?

There are multiple types of ADUs to choose from that add a unique value to your property. Depending on your intentions for your accessory dwelling unit, you will have to build a different type of ADU. There are three predominant types of ADUs:

1. Attached ADUs

Attached ADUs are anything that is attached to the home. If your garage is attached to your primary residence and you upgrade, remodel or convert it, it is considered an attached accessory dwelling unit. Attached ADUs can also be second-story additions, expansions to the home or a new suite. These ADUs add value to your property and increase the amount of usable space for you and your family.

An attached ADU can be an excellent option if you are caring for an elderly family member who needs assistance. You will still maintain some of your privacy while remaining close by to provide care for your loved one.

2. Detached ADUs

Detached ADUs are separate from the main home. These ADUs are often new construction, such as tiny homes or small cottages. They can also be garage conversions if your garage is separate from your home. These types of accessory dwelling units can be turned into housing for adult children or elderly family members. You can also choose to rent out these spaces to get a return on your investment.

A detached ADU is an excellent way to maintain your privacy while housing your family members or generating additional monthly income. You will need a good amount of space on your existing property for a detached accessory dwelling unit to accommodate construction, utility lines and parking spaces.

3. Internal Conversions

Internal conversions are ADUs that are contained entirely within the main home. These can consist of basement apartment conversions, attic remodels, Garage and junior conversions. These conversions are ideal if you’re looking to convert an existing part of your home into something more.

You can rent out your converted space or let a family member stay with you. You can also create an office space if you work from home. An internal dwelling space could also be useful as a yoga studio or workshop located conveniently in your home.

Should I Build an ADU on My Property?

ADUs can be an excellent addition to your property. If you are trying to sell your home and are looking for better offers, an ADU can add value to your property and bring you new buyers who are willing to offer more than asking price for your property. Or, you can build the home of your dreams by extending your current property and making the most of the additional space.

You should also consider building an ADU if you have a family member who could benefit from intergenerational housing. Over 64 million Americans currently live in intergenerational homes, enjoying advantages like saving on living and care costs. Your parents may have gotten to an age where they require supervision at home. You can maintain your privacy while still keeping an eye on them with an ADU.

If you have an adult child looking for affordable housing, an accessory dwelling unit can be a great place to live. If they just got out of high school or graduated college and are currently in a transitional period, an ADU can be a great stepping stone while they build their savings to look for a place of their own. With the average price of rent continuing to reach new highs, an ADU can be perfect for young adults looking for something within their budget.

Be sure to consider your budget and how much an accessory dwelling unit costs. On average, you will pay $300-$600 per square foot for a move in ready ADU. ADUs can be as small as 250 square feet but can be even bigger. There are also permit costs to consider, which vary by location.

Remember that an accessory dwelling unit will increase the value of your property. It is a long-term investment, and you can choose to rent out your ADU to see a return.

Add Value to Your California Home With Valley Home Builders

Perhaps an older relative or your adult child wants to live with you. Or maybe you need a private place for working or working out in your home. Rather than look for a new property, you can construct an ADU to expand, renovate and remodel your existing space to suit your needs.

With an ADU, you will be making an investment that adds value to your property. Valley Home Builders is dedicated to bringing you high-quality construction with excellent customer service. If you are considering constructing an ADU on your property and have questions, the experts at Valley Home Builders are here to help. Contact us today to learn more!