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What Is an Accessory Dwelling Unit, and Is It the Right Investment for You?

Debating whether to add a studio versus convert the garage to a studio? Either way, you're looking at adding an ADU.

[Updated: Jul 12, 2021 ] Apr 17, 2020 by Lena Katz

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The Essential Characteristics of an ADU What Doesn't Determine an ADU

• A room or set of rooms that comprise a self-contained living space on the same lot as a single-family home.

• An ADU must be located in a single-family-zoned neighborhood.

• In the estimation of the market, it is not recognized as a full-fledged second unit -- and probably not in the eyes of the city or county either.

• It can be rented out separately from the primary residence.

• Separate metering (although most ADUs are on the same meter as the primary home).

• Whether the unit is attached to the main house or freestanding.

• Separate addresses.

• The existence of a kitchen.

Andrew discusses ADUs, their benefits, and ways to add one to your property on the Millionacres Podcast
ADU Type Category Building Cost
In-law Attached ADU or detached ADU $44,000 for attached to $100,000+ for detached full dwelling
Cottage Detached ADU $60,000 to $185,000 (for 400 to 600 square feet, simple layout vs. complex)
Casita Attached ADU or detached ADU $34,400 to $83,200 (for 400 square feet)
Efficiency Attached ADU or Junior ADU $32,000 to $80,000
Garage or carport conversion Junior ADU $6,000 to $21,174
Above-garage apartment (lower end for 1-room addition; high end for full unit) Attached ADU $40,000 to $120,000
Basement apartment Junior ADU $22,000 to $46,000

Data sources: HomeAdvisor (NASDAQ: ANGI), Fixr, and HomeGuide

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