Adding an accessory dwelling unit (ADU) to a property has become more common in many neighborhoods. Some homeowners build them for extra income, while others want more space for family or guests. Local governments have also made it easier in recent years to build ADUs by adjusting zoning rules and permits. Still, deciding to add one isn’t simple. It comes with both benefits and drawbacks that should be weighed carefully.
What Is an ADU?
An ADU, or accessory dwelling unit, is a smaller home built on the same lot as a larger main house. It can take different forms—a detached backyard cottage, a garage converted into a studio, or even a basement turned into a separate apartment. Most ADUs have a kitchen, bathroom, sleeping area, and entrance of their own.
While they’re often called “granny flats” or “in-law units,” they can serve many purposes beyond housing family members.
Pros of Building an ADU
Building an ADU comes with several upsides, especially for homeowners looking to make the most of their property. Whether the goal is more space or financial support, the benefits are often attractive.
Extra Income Potential
One of the main reasons homeowners build ADUs is to earn rental income. Long-term tenants can help cover mortgage costs or property taxes. In cities where rent is high, a well-located ADU can bring in a steady monthly payment.
Some owners also use their ADUs as short-term rental housings through vacation platforms. This works best in tourist-heavy areas but often comes with local restrictions. Building an ADU requires good planning, so reading trusted guides and resources can help homeowners stay on track with costs, design, and legal steps.
More Living Space
An ADU provides extra space without requiring a move to a new home. It can be used by adult children, aging parents, or guests. Some homeowners turn their ADUs into home offices, art studios, or quiet places to work or relax.
Increase in Property Value
A well-designed ADU may increase the overall value of a property. Buyers often see it as a bonus, especially in crowded housing markets. The extra rental potential can also make the home more appealing.
In the long run, this added value can help homeowners build more equity or sell at a higher price.
Supports Multigenerational Living
Families living together but needing separate spaces can benefit from ADUs. They offer privacy while keeping loved ones close by. This can reduce the cost of senior care or outside rent and create a stronger family support system.
Cons of Building an ADU
Despite the benefits, ADUs also come with challenges. These include high costs, legal steps, and added responsibilities that should be taken seriously.
High Upfront Costs
Building an ADU requires a significant investment. Costs can range from USD$100,000 to USD$300,000 or more, depending on size, materials, location, and ADU type. Even simple conversions can be expensive due to building codes and permits.
Financing may also be an issue. Not everyone qualifies for home equity loans, and using savings may not be realistic for some.
Zoning and Permit Challenges
Although many cities now allow ADUs, not every property qualifies. Rules about size, height, setbacks, and parking still apply. The approval process can take time and involve multiple inspections.
Ignoring these rules could lead to fines or having to undo the work. Speaking with local officials before building is essential.
Maintenance and Management
An ADU is a separate space that needs care. If rented out, it also brings landlord duties like collecting rent, handling repairs, and resolving tenant concerns.
Short-term rental units often require more work, such as frequent cleaning and guest communication. Without help from a manager, this can become overwhelming.
Impact on Privacy
Adding another unit to the residential property can affect how much privacy both households have. Shared driveways, outdoor areas, or noise can lead to discomfort. This is especially true when the ADU is rented to people outside the family.
Thinking through daily routines and how the space will be used can help avoid tension later.
Things to Consider Before Building
Before making the decision, it’s important to consider several key factors. Planning ahead can make the process smoother and help avoid costly surprises.
Budget
Include everything from the construction process and permits to furniture and landscaping. Set aside extra funds for unexpected project costs.
Purpose
Think about how the ADU will be used. A space for the family may look different from one meant for renters or guests.
Local Rules
Always review your city or county’s laws on ADUs. Building permits, size limits, and zoning laws can vary by location.
Long-Term Goals
Consider how the ADU fits into your project plans for the next five to ten years. Will it serve the same purpose over time, or will your needs change?
Is It Worth It?
The answer depends on the homeowner’s goals and situation. For some, the ability to earn extra income or support their family makes the project well worth the cost. For others, the expense, effort, or legal process may be too much.
Careful planning and research can help make the decision clearer.
Final Thoughts
Building an ADU offers real benefits, including added income, extra space, and higher property value. But it also brings challenges like high costs, rules to follow, and ongoing management. Property owners should take the time to review local laws, plan their budgets, and think through their goals before moving forward. With the right approach, an ADU can be a great addition to a property. Without it, the ADU project could lead to more stress than reward.