ADU Design Ideas That Will Increase Your Property Value
What are some ADU design ideas that will increase your property value and maximize your ADU ROI? Keep reading and you’ll find out!
ADUs have a huge potential to impact the housing market in California. With the rate the accessory dwelling units (ADUs) have been influencing not only the housing market but also the seemingly never-ending affordable housing crisis, it’s safe to say that ADUs are transformative.
However, today, we’ll be looking at the micro-influence an ADU can have on a person’s life. For example — yours. Building an ADU can change the way you use your livable space. That’s not that surprising, given that one of the major benefits of ADUs is that it will increase it.
But it can also change your financials. The return on investment (ROI) that renting the ADU out could potentially have is worth considering.
An ADU offers excellent annual ROI. That’s true even if you use it as a backyard cottage for yourself or friends and family. However, the costs of investing as well as additional tax might exceed the annual returns and tax benefits in that scenario. Still, does that mean that granny flats are only worth investing in if you’ll use them for rental income? Absolutely not.
But let’s unpack this together, shall we?
ADU Design Ideas | Adding Value to Both Your Life and Your Property
So what happens when you put things on paper? It’s clear that ADUs can not only increase your overall square footage but also your cash flow. However, there’s more to ADU benefits than can be expressed as a percentage of net profit.
Having an ADU in your backyard can seem like a priceless luxury when you consider all other benefits. For example, if you turn the ADU into a home office, you can maintain a sense of normalcy while trying to work through a global pandemic. Furthermore, an ADU might be worth the initial investment when you consider the fact that it gives you the opportunity to safely house your friends and family during the holidays.
These benefits can’t really be put into numbers. ROI calculations might factor in maintenance costs and how quickly the extra cash flow will pay off the initial cost. However, they don’t reflect the social benefits that come from having extra space on your property.
Of course, since those vary from person to person, let’s dive into those that we can reflect in numbers, shall we?
Increasing Property Value
To many people, an ADU seems like a considerable investment. After all, it costs around $156,000 to build it (on average). Not to mention, the average cost and the actual cost might be two very different things. The actual price depends on the type of ADU you want to build, the space you have available, and the interior design features you had in mind.
However, given how much an ADU can increase your overall property value, it might be worth it. Even if you don’t end up doing anything with it, you’ll still have more space than you had to begin with. Therefore, when the time comes, and you decide to sell your home, you’ll turn a profit.
How? Well, the statewide median price of a single-family house in California is around $813,980 (as of April 2021), and the average house size is between 1,150 and 2,417 square feet. That means that, on average, the cost per square foot in California is anywhere between $707 and $336. So, adding an extra 1,000 square feet by building an ADU in your backyard can get you a hefty payout when selling time comes around.
What’s more, ADUs became popular during the previous 18 to 24 months due to their benefits amid a global pandemic. So, selling a property with an extra living unit on it will increase your chances of getting a payout that can be up to 35% higher than if there were no ADU on the property.
But which ADU designs will get you the biggest payout in the end?
ADU Design Ideas | Mother-In-Law Suite
ADUs are more widely known as granny flats or mother-in-law units. That’s because they offer an excellent chance for multigenerational living or aging in place. Rather than having your parents or in-laws stay in their own homes or go into assisted living facilities, you can move them in with you without sacrificing either your privacy or their independence.
A mother-in-law suite is usually a single-story one-bedroom unit. Sometimes, it can even be a studio that cleverly uses the available space. Some of the main features of these types of units are:
- Accessibility (that includes no stairs, an open concept kitchen and living room, non-slip floors, etc.)
- Spacious walk-in showers
- Remote control systems (such as the thermostat and security systems)
Now, these features make life easier for the elderly. However, they also make the ADU more versatile. One day, when your elderly loved ones are no longer with you, these features will allow you to put the ADU to good use. You could rent it out or use it as a guest house or even move in other family members.
Guest or Pool House
Detached ADUs offer a great chance to make a guest house (or even a pool house if you have a pool in your backyard). The main feature of ADU guest houses is that they are distanced from the main house and offer privacy to both you and your guests.
ADU guest houses are great for relatives and friends who plan on staying longer than a few days. A pull-out couch or a guest room might not be the best solution in those situations.
Of course, the best part of having an ADU as a guest house is that you can always quickly turn it into something else. The versatility of any ADU unit is one of the significant benefits.
Luxury ADU (For Getaways, Staycations, and Visiting Family Members)
Thanks to global events that turned traveling into a greater luxury than ever, luxury ADUs became more popular. Having a secluded space, away from your home, where you can take a staycation proved beneficial over the last two years. It’s a “home away from home” that lets you experience vacation vibes without actually going anywhere.
These types of ADUs can increase your property value because, although travel bans are no longer in place, the global pandemic made all of us realize just how valuable these “staycation properties” are.
Renting Out Your ADU
Of course, the most significant financial benefits of building an ADU come from renting it out. When it comes to building an ADU for rental purposes, you can opt for one of three designs (depending on who you actually plan on renting the ADU to).
For example, you can design your ADU, so it’s a suitable long-term home for families or single tenants. That means that you can pretty much opt for any design that offers enough livable space. One-bedroom ADUs are probably your best choice here since they are the most versatile.
ADU Design Ideas | Multifunctional Home Offices
If you’re building an ADU simply because you need a bit of extra space for your home office, then opting for a studio-style ADU might be the best idea. And, once you no longer need that home office, you can rent it out to other WFH people who don’t actually like working from (their own) home.
A studio ADU allows you to turn your extra living space into an office that you can rent out. That is an excellent option for those who don’t think having tenants in their yard 24/7 is something they’d be comfortable with.
Yoga, Music Or Gym Studios
If you’re a small business owner who offers products or services to others, then you know just how hard it was to maintain a business during a global pandemic. Keeping up with rent (be it for an office or a storage unit) was a feat like no other. It was also a losing battle for many.
ADUs came in handy to those lucky enough to have them on their property. They allowed people to create their studios (be they yoga, music, or gym studios) and still have a profitable business.
Even if you’re not interested in having a backyard business that runs out of your ADU, other people might be. In other words, opting for a studio design could potentially make your ADU a more attractive piece of real estate to potential renters looking for spaces where they can hold classes or offer their services.
Cedar Dwellings: the Safest Investment | ADU Design Ideas
Here at Cedar Dwellings, we combine comfort and style to create the ideal contemporary coastal-inspired ADUs that will increase the value of your home and your life. Adding value is what we’re all about, which is why we offer not only design and construction but also:
- ADU renter help to ensure your investment actually pays off
- Fast and quiet build that won’t get you blacklisted in your neighborhood
- Eco-friendly and energy-efficient construction with waste-free pannels
Depending on what you need, one of our three units will surely be a good fit for you. Whether it’s the compact and versatile Cedar X studio, the cozy yet spacious one-bedroom Cedar 1, or the roomy Cedar 2+2 that has two beds and two baths, you’ll find the ADU of your dreams at Cedar Dwellings.
So don’t waste time! Give us a call today, and let’s talk about adding value to your property!