6 Reasons to Build an Accessory Dwelling Unit (ADU)

Accessory dwelling units (ADUs) are on the rise. 

Sometimes known as granny flats, in-law suites, or garage apartments, ADUs are becoming increasingly popular as housing becomes increasingly unaffordable. 

What exactly is an ADU, you ask? It’s a small dwelling unit built on the same lot as a (usually larger) primary residence. Most ADUs are less than 1,000 square feet.

ADUs come in many forms. They can be attached, detached, or internal to the main property. But in order to be classified as an ADU, it must have a separate entrance as well as all of the necessary accommodations for living: a bathroom, kitchen, heating, plumbing, electricity, and so on.

As you might expect, one of the main appeals of ADUs is that they can be much cheaper to buy or live in than a regular home. But that’s not all.

In this article, we’ll go over six different reasons you might consider adding an ADU to your primary residence.

Let’s get started!

1. Earn rental income

Since ADUs are fully liveable, you can rent them out to earn extra money.

For example, you could turn your ADU into a traditional long-term rental for tenants who don’t require much space, or you could rent it out as a short-term rental (STR) on platforms like Airbnb and VRBO (just make sure you check your local housing regulations to make sure STRs are allowed in your area).

This can be an easy way to get into real estate investing without having to buy an entirely separate investment property. And if you’re not fond of becoming a landlord, you can outsource all the management work to a property manager, thereby making your ADU a truly passive investment.

2. Increase the value of your home

Another reason you might consider building an ADU is to increase the value of your home. According to United Dwelling, ADUs can increase the value of your property by up to 50%!

How? When you eventually go to sell your property, the ADU will give it more appeal and help it stand out. Homebuyers may be interested in using it as extra living space, an office, or to generate rental income to offset their mortgage. 

In short, ADUs are a great way to speed up your property’s appreciation. 

3. Host family and friends from out of town

An ADU also makes it easier to host guests. Instead of putting them somewhere inside your house like a guestroom where they must share a bathroom, you can give them their own space (which is especially nice for longer stays).

This gives you and your guests more privacy, while still allowing you to be close enough to spend a lot of time together. Your family and friends might enjoy their stay more and be more likely to visit as a result. 

4. Take care of your aging parents

Another way you can use an ADU is to house aging family members. Maybe it falls on you to take care of your elderly parents. If so, ADUs offer a great solution.

They allow your parents to maintain some level of privacy and automony, while still allowing you to provide them with the help they need (e.g. with daily activities like transportation and cooking). 

When you consider the what alternative solutions such as assisted living facilities cost (about $54,000 per year), an ADU can save you a lot of money in the long run.

5. Help your adult children

For a variety of reasons including the high cost of housing and education, many adult children are choosing to live at home longer. 

An ADU can be a great way to help your adult child until they’re able to get on their feet. It gives them the chance to save up for their own place, while still giving them some level of independence.

You could even charge your adult child some minimal rent because it’s better than what they could get elsewhere. 

6. Create your own office space

Lastly, an ADU can make for a great office. 

With so many people working remotely these days, you may have found yourself in need of a new home office. Maybe you’ve been working in the closet or in your living room, and it’s time to get your own designated workspace.

An ADU lets you have the privacy and quiet you need to concentrate and work hard, while still letting you work from home. 

If you run your own business, an ADU can also be a great place to meet potential and regular clients. That way, you don’t have to invite them into your home every time and you can make a more professional impression.

The bottom line

As you can see, there are many good reasons to add an ADU to your home. If you’ve been looking for a versatilve home addition, this may be the one! It’s a great way to add more utility to your home and increase its value and income potential. 

Do some research on zoning regulations to see if ADUs are allowed in your area. Then get to work!