{"id":298563,"date":"2024-01-31T04:46:50","date_gmt":"2024-01-31T09:46:50","guid":{"rendered":"https:\/\/www.houzeo.com\/blog\/?p=298563"},"modified":"2025-07-23T01:56:26","modified_gmt":"2025-07-23T05:56:26","slug":"what-is-an-adu","status":"publish","type":"post","link":"https:\/\/www.houzeo.com\/blog\/what-is-an-adu\/","title":{"rendered":"What Is an ADU (Accessory Dwelling Unit) in Real Estate?"},"content":{"rendered":"\n<p>An Accessory Dwelling Unit (ADU) is a secondary house or an apartment that shares its structure with a primary residence. An ADU can be attached or detached to a primary residence and belongs to the owner of the <a href=\"https:\/\/www.houzeo.com\/blog\/single-family-home\/\" target=\"_blank\" rel=\"noreferrer noopener\">single-family home<\/a>. You cannot buy or sell it separately, but you can rent it out.<\/p>\n\n\n\n<p> An ADU can increase your home&#8217;s value by <a href=\"https:\/\/porch.com\/advice\/state-of-adu-market-2021\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">35%<\/a>! So, if your home is priced at $500,000, you could gain $175,000 more.<\/p>\n\n\n\n<div class=\"block-takeaways\" style=\"margin-top:20px !important\"><p><\/p><p class=\"headKeytake\"><b> Key points of an ADU \ud83c\udfd8\ufe0f<\/b><\/p>\n<ul>\n<li>An Additional Dwelling Unit can be a source of passive income for you. You can either rent it out or create spaces like an office or storage.\n<\/li>\n<li>An ADU can be attached to or detached from the primary structure. It can also be converted from a garage, attic, or a basement.\n<\/li>\n<li>Building an Additional Dwelling Unit costs about <a href=\"#how-much-does-adu-cost\">$60,000 to $225,000<\/a> in 2024.\n<\/li>\n<\/ul>\n<\/div>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"what-is-an-adu-in-real-estate\"><strong>What Is an ADU in Real Estate?<\/strong><\/h2>\n\n\n\n<p>An ADU is a house separated from a primary residence. It is also called a granny flat, garage apartment, or in-law suite. It serves various purposes like housing a family member, getting rental income, or creating a home office. Adding an ADU to your residence can increase your <a href=\"https:\/\/www.houzeo.com\/blog\/how-much-is-my-house-worth\/\" target=\"_blank\" rel=\"noreferrer noopener\">property&#8217;s value<\/a>.<\/p>\n\n\n\n<p>An Additional Dwelling Unit is subject to local zoning laws. Hence, it is necessary to check these regulations before you build one.<\/p>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"types-of-adus\"><strong>Types of ADUs<\/strong><\/h2>\n\n\n\n<p>Here are some Additional Dwelling Unit examples:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Attached:<\/strong> This type of dwelling is connected to the main house. It has its entrance, kitchen, beds, and baths. However, it may share a wall, floor, and ceiling with the primary residence.<\/li><li><strong>Detached:<\/strong> Detached Additional Dwelling Units stand independent of the primary structure. However, it is situated on the same plot of land.<\/li><li><strong>Garage:<\/strong> These are ADUs converted from garages to living spaces. They have a separate area equipped with an entrance and a kitchen.<\/li><li><strong>Basement or Attic:<\/strong> Here, an attic or a basement is converted into a separate living space. They are a cost-effective way to convert existing spaces into additional dwelling units without new construction.<\/li><li><strong>Internal:<\/strong> These are any space other than an attic or a basement converted to an Accessory Dwelling Unit.<\/li><\/ul>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"how-much-does-adu-cost\"><strong>How Much Does an Accessory Dwelling Unit Cost?<\/strong><\/h2>\n\n\n\n<p>On average, building an Additional Dwelling Unit can cost you anywhere between <a href=\"https:\/\/www.angi.com\/articles\/how-much-do-adu-costs.htm\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">$60,000 to $225,000<\/a> in 2024. It typically varies according to the type of ADU you&#8217;re building. For instance, a new construction built above a garage costs about $150 per square foot, but a fully detached one can cost twice that amount.<\/p>\n\n\n\n<p>Here are some costs you incur when building an ADU house:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Building Materials:<\/strong> Includes costs of lumber, doors, windows, roofing, etc. It is usually 45% to 50% of the total expenses.<\/li><li><strong>Permits: <\/strong>Local permits for building an ADU cost about <a href=\"https:\/\/www.angi.com\/articles\/how-much-do-adu-costs.htm\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">$1,350<\/a>.<\/li><li><strong>Design Costs:<\/strong> Creating a design for your ADU can come up to 10% to 15% of the total project expense.<\/li><li><strong>Site Prep:<\/strong> This can include land leveling and grading. It is about $1,000 to $5,800 on average.<\/li><li><strong>Foundation:<\/strong> ADUs constructed above the garage or detached from the primary residence require a new foundation. Typically, it costs about $2,400 to $30,000. Basement Additional Dwelling Units need not incur this expense.<\/li><li><strong>Framing:<\/strong> These prices depend on the framing you install in the ADU home, averaging $25,000. Metal frames are more expensive than lumber.<\/li><li><strong>Finishing:<\/strong> This involves costs incurred for flooring, walls, insulation, stairs, etc., and is about $10 to $50 per sq. ft.<\/li><li><strong>HVAC and Plumbing Systems:<\/strong> You need to pay an additional $3,400 to $10,400 for installing heating, cooling, air conditioning, and plumbing systems.<\/li><li><strong>Labor fees:<\/strong> Includes fees of the architect, structural engineer, contractor, and other technicians, making up about 40% of the total expense.<\/li><li><strong>Waste Disposal and Clean-up:<\/strong> New constructions can create a truckload of waste. Its cleaning and disposal may cost anywhere between $60 and $600.<\/li><\/ul>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"pros-and-cons-of-adu\"><strong>ADU Pros and Cons<\/strong><\/h2>\n\n\n\n<p>Here are some advantages and disadvantages of building an Additional Dwelling Unit on your plot:<\/p>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\"><strong>\u2705 Pros<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Additional Income:<\/strong> You can rent out ADU homes to get a steady source of income. An ADU home&#8217;s rent can range from <a href=\"https:\/\/maxablespace.com\/how-much-can-i-rent-my-adu-for\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">$1,300 to $2,900<\/a>.<\/li><li><strong>Affordability:<\/strong> ADU homes are cheaper to build and maintain than full-sized homes. They use less energy and resources.<\/li><li><strong>Flexible Use:<\/strong> ADU houses have multiple uses &#8211; they can house families, guests, students, or caregivers. You can also use them as a home office, studio, or storage space.<\/li><\/ul>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\"><strong>\u274c Cons<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Permits and Zoning Laws:<\/strong> Getting the permits to build an ADU can be challenging, time-consuming, costly, and uncertain. Likewise, you must be aware of and adhere to local zoning laws before building an ADU.<\/li><li><strong>Reduced Area:<\/strong> ADU dwellings take up a lot of space, especially the ones built outside the <a href=\"https:\/\/www.houzeo.com\/blog\/primary-residence\/\" target=\"_blank\" rel=\"noreferrer noopener\">primary residence<\/a>. <\/li><li><strong>Potential Conflicts and Liabilities:<\/strong> ADU homes may create conflicts related to privacy, security, or noise between the owner and tenants.<\/li><\/ul>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"how-much-value-does-an-adu-add\"><strong>Bottom Line: How Much Value Does an ADU Add to Your Home?<\/strong><\/h2>\n\n\n\n<p>A whopping <a href=\"https:\/\/porch.com\/advice\/state-of-adu-market-2021\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">35%<\/a>! One study found that homes with an ADU were priced 35% more than those without one. In 21 US cities, listings with ADUs were priced double than regular listings.<\/p>\n\n\n\n<p>However, this largely depends on the size and location of the Additional Dwelling Unit. Urban areas with less space for <a href=\"https:\/\/www.houzeo.com\/blog\/how-to-build-a-house\/\" target=\"_blank\" rel=\"noreferrer noopener\">new construction<\/a> are lucrative opportunities for building an ADU.<\/p>\n\n\n\n<h2 class=\"margin-top-25 wp-block-heading\"><strong>Find Your New Home With Houzeo<\/strong><\/h2>\n\n\n\n<p>With thousands of property listings,&nbsp;<a href=\"https:\/\/www.houzeo.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Houzeo.com<\/a>&nbsp;is one of the biggest property listing sites in the US. Find condos, townhouses, co-ops, and other types of&nbsp;<a href=\"https:\/\/www.houzeo.com\/homes-for-sale\" target=\"_blank\" rel=\"noreferrer noopener\">homes for sale<\/a>&nbsp;on Houzeo, America\u2019s best home buying website.<\/p>\n\n\n\n<p><strong>\u00bb NEED MORE CLARITY?&nbsp;<\/strong>Read these exclusive&nbsp;<a href=\"https:\/\/www.realestatequeen.com\/houzeo-reviews\/\" target=\"_blank\" rel=\"noreferrer noopener\">Houzeo reviews<\/a>&nbsp;and learn why the platform is the best in America\u2019s competitive housing market.<\/p>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"faqs\"><strong>FAQs<\/strong><\/h2>\n\n\n\t\t<div class=\"wp-faq-schema-wrap wp-faq-schema-accordion\">\n\t\t\t\t\t\t<div class=\"wp-faq-schema-items\">\n\t\t\t\t\t\t\t\t\t<p class=\"ui-accordion-header\">\n\t\t\t\t\t\tWhat does ADU stand for in real estate?\t\t\t\t\t\t<span class=\"ui-accordion-header-icon ui-icon ui-icon-triangle-1-s\"><\/span>\n\t\t\t\t\t<\/p>\n\t\t\t\t\t<div class=\"ui-accordion-content\">\n\t\t\t\t\t\t<p>An ADU stands for an 'Accessory Dwelling Unit' in real estate. It is a secondary house or an apartment that shares its structure with a <a href=\"https:\/\/www.houzeo.com\/blog\/primary-residence\/\" target=\"_blank\">primary residence<\/a>.<\/p>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<p class=\"ui-accordion-header\">\n\t\t\t\t\t\tDoes an ADU add value to your home?\t\t\t\t\t\t<span class=\"ui-accordion-header-icon ui-icon ui-icon-triangle-1-s\"><\/span>\n\t\t\t\t\t<\/p>\n\t\t\t\t\t<div class=\"ui-accordion-content\">\n\t\t\t\t\t\t<p>Yes. One study found that homes that had an <a href=\"https:\/\/www.houzeo.com\/blog\/what-is-an-adu\/\" target=\"_blank\">Additional Dwelling Unit <\/a> were priced 35% higher than homes that didn't.<\/p>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<p class=\"ui-accordion-header\">\n\t\t\t\t\t\tHow to finance an ADU?\t\t\t\t\t\t<span class=\"ui-accordion-header-icon ui-icon ui-icon-triangle-1-s\"><\/span>\n\t\t\t\t\t<\/p>\n\t\t\t\t\t<div class=\"ui-accordion-content\">\n\t\t\t\t\t\t<p>You can finance an ADU construction by taking a <a href=\"https:\/\/www.houzeo.com\/blog\/cash-out-refinance\/\" target=\"_blank\">cash-out refinance<\/a> or get a <a href=\"https:\/\/www.houzeo.com\/blog\/home-equity-line-of-credit\/\" target=\"_blank\">home equity loan<\/a>.<\/p>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\n","protected":false},"excerpt":{"rendered":"<div class=\"new-excerpt\"><p class=\"small-desc\">An Accessory Dwelling Unit (ADU) is a secondary house or an apartment that shares its structure with a primary residence. An ADU can be attached or detached to a primary residence and belongs to the owner of...<\/p><\/div><div class=\"reading_date\"><span class=\"readtime\">5 mins read<\/span><span class=\"date\">Jan 31, 2024<\/span><\/div>","protected":false},"author":102,"featured_media":428978,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46225],"tags":[],"class_list":["post-298563","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buyer"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Is an ADU (Accessory Dwelling Unit) in Real Estate?<\/title>\n<meta name=\"description\" content=\"Looking to understand what an ADU is and how it can be used in real estate? 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