Many homeowners have already considered building ADUs (Accessory Dwelling Units) in their backyards to provide additional accommodation and to address the shortage of housing. Also known as a granny flat or a backyard cottage, and an ADU unit has the same amenities found inside the main unit so the homeowner can also live comfortably there.
And while it is primarily designed for housing aging parents and growing teenagers who want to live independently, an ADU unit can also be a means for generating passive income through renting or leasing. Other than that, it can also increase the resale value of your property.
So if you’re already asking yourself this question “how to determine how much value an ADU will add to your home?” then we suggest you to read further as we are going to tackle more this topic in today’s post.
Types Of ADU Units
To get a sense of how an Accessory Dwelling Unit can increase the resale value of your home, let’s look into the different types of ADU units and how they are installed or integrated into your property:
- Attached ADU Unit – Basically, this type of ADU is the kind that is used for garage conversion (additional installation of a garage beside the main house), second-story additions, new additions, and a “mother-in-law suite”.
- Detached ADU – This ADU can also be used for a separate garage conversion, construction of new accommodation, granny flat or backyard cottage.
- Interior Conversion – This ADU extension is integrated inside the main house as a basement apartment, a “junior ADU”, and an additional unit installed during attic remodeling.
These are the types of ADU units that can be built by an ADU construction company in the United States.
Determining The Value It Can Add To Your Property
According to realty experts, it is hard to know the exact value that an Accessory Dwelling Unit can add to your property since this data is highly dependent on the market you belong to. However, there is no debate whether it can add value or not since it is reported that an ADU unit is priced around half or a third of the value per square foot of the main house. And when done right, a detached ADU unit can even increase the value of your property by up to 30%.
On the other hand, experts say that you should also focus on the rental income it can generate because you’ll definitely get the best value if it’s rented by the right person. As a result, it helps you to earn passive income on a regular basis up until you decide to post your property as “for sale” in the market.
All in all, an ADU unit offers a lucrative investment opportunity, but make sure that the ADU unit is situated in a way that is appropriate to the design of your house. Because placing the unit in an awkward location may decrease your property’s value a bit. So make sure the ADU unit meets the expected standards as much as possible.