Accessory Dwelling Units: Unlocking Extra Living Space on Your Property
Question
Answer
Accessory Dwelling Units (ADUs) are self-contained living quarters located on the same lot as a primary home. Often called granny flats, in-law suites or backyard cottages, ADUs provide extra housing — whether you rent it out for supplemental income, host family members, or create a private workspace.
In the U.S., ADUs typically range from 400 to 1,000 sq ft and include their own entrance, kitchen, bathroom and living area. You’ll commonly see three ADU types:
- Detached: A separate building in the backyard
- Attached: An addition built onto the main house
- Garage conversion: Repurposing existing garage space
Key benefits of adding an ADU:
- Rental income: Average monthly rents range from $800 to $2,000, depending on location and size.
- Multigenerational living: Offers private quarters for aging parents or adult children.
- Property value: Studies show an ADU can increase home value by 15–20 percent.
Before you break ground, confirm local zoning rules and permit requirements. Regulations vary widely by city and county, but most jurisdictions require:
- Zoning clearance: Verify your lot permits an ADU.
- Building permits: Expect fees in the $3,000–$10,000 range and inspections for plumbing, electrical and structure.
- Impact fees: Some areas charge utility or school impact fees; others waive them to encourage ADUs.
Financing options include home-equity loans, renovation mortgages (like FHA 203(k)), or construction loans. Interest rates generally run slightly higher than standard mortgages, so buyers are recommended to verify current rates with lenders.
While adding an ADU can boost income and flexibility, it’s advisable to consult a licensed attorney or local planning department to navigate zoning, building codes and tax implications before you proceed.
