By Angie Hicks
Accessory dwelling units (ADUs) are becoming a game-changer in modern homeownership. Whether you’re looking to generate passive income, house a family member, or expand your livable space, ADUs offer flexibility and long-term value. But turning that vision into reality takes thoughtful planning, permits, and the right professionals.
An ADU—short for accessory dwelling unit—is a secondary housing structure on the same lot as a main residence. These versatile spaces are often called in-law suites, guest houses, or backyard cottages. Depending on your setup and needs, an ADU could be a converted garage, a basement apartment, or a stand-alone mini-home.
The 2024 Angi State of Home Spending Report reveals that one in four homeowners now lives in a multigenerational household. These families are more likely to take on significant renovations, and ADUs are often at the top of the list. They provide privacy for extended family, more room for growing kids, or a separate space to rent out for extra income.
An ADU can be adapted for a wide range of uses:
Multigenerational living: Perfect for aging parents or adult children needing independent space.
Rental income: Rent it out for long-term tenants or as a short-term vacation rental.
Home office or studio: Get creative with your space—set up an art studio, office, or fitness room.
Storage or hobby area: Keep clutter out of the main house while still having easy access.
Even if your lot isn’t huge, you still have options. Many homeowners successfully convert sheds, garages, or other existing structures into functional ADUs.
Building an ADU isn’t just about lifestyle—it’s a smart investment. Studies suggest that adding an ADU can increase your property value by as much as 30%. However, it’s essential to remember that an ADU is always legally tied to the primary home. It can’t be sold separately and must comply with local housing regulations.
Housing-oriented ADUs typically require:
A separate entrance
A full bathroom
A functioning kitchen (with counters, cabinets, running water, and a stove)
Local zoning and permitting rules vary, so always consult your city or county before starting the project.
Costs depend on the type of ADU and the complexity of construction:
Garage or basement conversion: $20,000–$50,000
New, detached ADU: $40,000–$125,000 or more
These units will increase your property tax and utility bills, and they require regular upkeep—just like a main home. That’s why it’s crucial to view an ADU as a long-term investment, not just a quick fix.
Building an ADU is rarely a DIY project. From running utilities to securing permits, you’ll need licensed contractors who understand local codes and the complexity of residential construction. The right professional can guide you through everything—from design to inspections—ensuring your ADU is both safe and legal.
Whether you’re dreaming of a rental unit or creating space for loved ones, an ADU can be a brilliant solution—if done right. With the right planning and team, you can unlock a new level of function and value on your property.
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