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Top 6 Reasons to Build an Accessory Dwelling Unit (ADU) in California

Updated: Feb 16, 2023

In a skyrocketing housing market with prices soaring, Accessory Dwelling Units (ADU) may just be the low-cost answer we’re all searching for.

An ADU is defined as a smaller, independent residential dwelling unit that is located on the same lot as a stand-alone single-family home. In California they include a bathroom and kitchen. They are commonly referred to as Tiny homes, secondary suites, and granny flats.

In a time of high housing costs, ADUs are fairly easy to install for a quick low-cost housing option. Additionally, ADUs can provide a second income, as well as a safe place for aging family members or even your boomerang kid waiting for their big break after college.

As a smart homeowner, and a future landlord there are many reasons to build an accessory dwelling unit on your property. Here are the top six:

1. Earn passive additional income

One of the main reasons why many choose to build an ADU is the added income. This can be a huge benefit whether you are struggling with a high monthly mortgage payment or just want to jumpstart the savings for your next adventure. ADUs are typically built to host all the needed amenities for a completely independent living situation. With that, you can legally rent the space out just as you would a separate apartment or condo.

Another option for empty-nesters who are looking to scale down is to actually move into the ADU and instead rent out their main home. Sites like Air BnB, VRBO, and other vacation rental platforms are becoming increasingly popular for people renting out their spaces. These platforms can also be good options for those wanting to try it out first or who are also not wanting to lock into a long-term situation. Read our article on Airbnb vs Long term rental.

2. Increase your home’s value

Similar to most housing renovations and improvements, ADUs can significantly increase the property value of your home. A study done in Portland, Oregon found that the addition of an ADU raised a home’s resale value by an average of 51%. These additions increase the versatility of your home to add to the interest of potential buyers. In addition, since you already did the work of building the structure, the new buyers have an easy option for a potential revenue source if they choose to rent it out. Whether you put your home on the market or plan to pass it down to your kids, increasing your home value with an ADU is the easy choice.

3. Perfect to keep your aging family members close

With older family members, it’s natural to want to keep them close. Though sharing a bathroom with your mother-in-law for the rest of her life may not be what you were picturing. Honestly, even for many elderly individuals, they may not be excited to completely give up their independence so soon either. On top of that, nursing homes can be ridiculously expensive if your older family member doesn’t even need that level of care.

An ADU is a great compromise between an independent living situation and moving your family closer to you. With the perks of ADUs, your aging mother-in-law can still have her own independence (and bathroom) but also still be close enough to check-in, wander over for family dinners and maybe even babysit once in a while.

4. Help to add options amidst rising housing costs

The cost of living has increased significantly over the last few years especially in the metro cities. As prices soar, the expense that people struggle with the most, is their rent payment. Building an ADU is a way to create an easy low-cost housing option for your community. This can be an alternative housing situation that could be rented out to someone for a reduced cost. It could also provide an option for your own children struggling to find an apartment or house of their own in this unaffordable housing market.

5. Reduce your carbon footprint

Due to their small size, ADUs are also good for the environment. Building these units on already developed property reduces the need to build more onto undisturbed environments. They also provide compact living situations that benefit a greater number of people using fewer resources in comparison to separately living in an entirely new home. California’s Title 24 is moving to towards a zero emissions, if you plan on building an ADU before 2023 you will have to be solar ready, but not subject to paying for them now.

6. The design options are endless

The flexibility and design options for building an ADU are fairly limitless. These additional units can be built either attached or detached completely from the main home. They can be added above a garage, above the main home such as a separated apartment, or can even be a garage that has been converted into a livable space. Most cities give ADUs a separate address, which means you can convert your garage into an office or Yoga studio.

Ultimately, the design of your ADU depends completely on what you envision for the space. If you’re looking to rent out the unit for additional income, it’s usually preferred to have a separate, detached structure. While on the other hand, if you’re looking for a quick spot to house your sassy teenager who’s asking for more independence, you may choose to keep your ADU a bit more connected to the family home. Either way, you have a wide variety of options when starting to plan for an ADU.

Accessory Dwelling Units are an addition to your home that not only increase property value and help keep family together but also can be an easy source for additional income. These granny flats are an eco-friendly option as we all try to reduce our carbon footprint. With affordable building costs and endless design options, ADUs are California’s tiny homes of the future.

What are you waiting for?

Are you interested in learning about how you can add ADU to your property? Contact NEO Builders Inc. For more information about how we can help you make this dream a reality.



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