What is an ADU and Its Benefits?

What is an ADU and Its Benefits?

What is an ADU? An accessory dwelling unit (ADU) is a second, smaller residential building that shares the same lot as a primary residence. Other names used historically have included in-law apartments or mother-in-law suites or casitas. The current technical term ADU and backyard cottage are gaining more popularity.

Standard ADUs have their own kitchens, living room and often a bedroom. ADUs typically have their own separate entrances, which provides privacy and independence to the occupant. Newer ADUs are converted to a separate office space, gym, or craft studios to provide separate space for the primary home resident.

There are several types of ADUs to be aware of:

  • Detached ADU: A detached ADU is a stand-alone unit. It generally will make use of the water and energy connections of the primary house. These units are more common in the Western and Southern regions of the country where more land is available. Detached ADUs typically range from 350 to 1,200 square feet.
  • Attached ADU: An attached ADU attaches to the house. It’s that simple. Instead of being its own standalone unit, the ADU joins the primary residence and enlarges the primary residence.
  • Garage Conversion: A garage conversion turns the garage or the space above a garage into an ADU for a separate residence. Garage conversions are more popular in the Eastern part of the country where less land is available.
  • Internal Conversion: An internal conversion turns certain parts of the home. Typical examples include a basement conversion or attic conversion.
several types of ADU
Source: Washington County Oregon Land Use & Transportation

Benefits of an ADU

Two reasons: Space and Money.  

The first benefit is space. ADUs provide extra space for family members and guests. Unlike a guest room in the primary residence, ADUs provide your family members and guests that independence. It also provides comfort and privacy that make living together an amazing experience for everyone. ADUs have kitchens, living rooms and even bedrooms that make them a home within a home. No more tight spaces or claustrophobic feelings when your house gets crowded.

The second benefit is investment and rental income. ADUs, particularly in California, are providing additional housing in a tight housing supply. With one bedroom apartments often going for $2,000 to $3,000 in the Bay Area in tight spaces, tenants may instead seek the tranquility outside of major urban areas. In a post-COVID era, there may be less commute and need to live in urban centers.

ADUs will typically increase property value. With increased property value and possible consistent cash flow and income from rentals, ADUs can add real value. While there are costs associated with the development of a unit, speaking to a specialist will provide some guidance whether building an ADU will be the right fit for you.