An Accessory Dwelling Unit (ADU) is an extra living space you add on to an existing residence
Often times called a “Granny Flat” or a “mother-in-law” suite, but relax: most of the time (if you’re lucky) your mother-in-law is not going to reside in the ADU.
In fact, most homeowners use them as a source of rental income or as a supplemental living space. In this article, we’ll focus on the rental property potential because that’s why ADU construction in Los Angeles has become so popular. The massive demand for housing in LA and surrounding areas, has made it so local laws have welcomed ADU development as a way to manage the housing crisis.
So if you’re an owner that’s asking Why should I build an ADU?
It is simple. ADUs increase property value and add potential for rental income!
One of the few win wins when it comes to mother-in-laws, right?
(ok no more jabs at the in-laws from here on out)
The three most common types of ADUs are: attached, detached, and interior conversions
A detached ADU is a separate structure from the main residence. It increases the property’s square footage and appraisal value without the same limitations that the other categories might have. In Los Angeles, adding 1,000 square feet can raise the property value by almost half a million dollars.
An attached ADU is an extension of the main residence, but it cannot exceed 50% of the current square footage of the property. Within this category of attached ADUs is the “Junior Accessory Dwelling Units” aka JADU. This is what you get when you add a small kitchen and exterior door to a space in an existing single family. It may include a bathroom OR may share a bathroom with the primary dwelling.
Another type of ADU is a garage conversion, which is usually the least expensive style to build, but it does have some drawbacks. Most obviously, you’ll lose some/all of your garage…and that may hurt the property value. Having said that, a garage conversion can generate significant income.
What to consider when building an ADU
So now you’ve got your options for adding an ADU, but choosing the best path is really going to depend on the physical layout of your property, your goals for the space, and your budget. Here’s what to consider before building an accessory dwelling unit:
- Assess the total cost of the construction. Now add 25% to that estimate because construction usually has unexpected costs and last minute updates that require more money.
- Review the current ADU guidelines and code specifications – they will vary by local zoning ordinances. For example if you are building an ADU in Los Angeles and you don’t have an egress window, it’s gonna be a problem.
- Don’t think that watching 10,000 hours of HGTV gives you the skills to complete this project without professionals. If you have that DIY itch, start on a birdhouse. If you come back to find at least one bird that’s made it a home, then you have our blessing to put hammer to nail on your ADU. Until then, LEAVE IT TO THE PROS because unlike that birdhouse, this ADU is gonna have to attract a tenant that will actually pay you one day.
- Insulate the ADU appropriately because cold tenants light fires to stay warm…and nothing decreases property values like the fire department
- Soundproofing, natural light, and ventilation will all be important factors when making the ADU feel like someone’s home. Just because it’s called a mother-in-law, doesn’t mean you can get away with making it feel like a dungeon.
Accessory dwelling units are easy ways to increase property value while also increasing income or privacy. And remember, that Granny’s can be cool too…so think hip and modern when designing your Granny Flat. Get creative with your architect and contractor…but don’t forget to have a convo about permits before it’s too late. Not every ADU must be permitted, but if you get caught running afoul of some of the stricter local guidelines, even Granny’s Antique Elvis Plate collection won’t save you from the costs to get things back up to code.
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Now we must bid you ADU