What is an Accessory Dwelling Unit (ADU)?
Basically, when you build an additional structure on a property that already has a central unit, then you’ve got yourself an accessory Dwelling Unit (ADU). Also known as Granny Flats, Casitas, or In-Law Suites, an ADU can be built on a single-family property, multi-family property, or duplex.
An ADU has everything a resident needs:
- An entrance separate from the main unit
- A kitchen
- A bathroom
- Living space
For this reason, ADUs can be rented all year. They also add significant value to your property.
ADUs can be:
- Garage conversions
- Stand-alone units
- Attic conversions
- Basement conversions
- Attached to the main property
What Are the Benefits of an Accessory Dwelling Unit?
Passive Income Stream + Increased Property Value
Alternatively, a property owner could choose to live in the ADU and rent out their primary residence instead. Either way, an ADU will also increase the value of your property.
What’s the Difference Between a Tiny House and an Accessory Dwelling Units?
- ADUs are permanent and sit adjacent to, near, or in conjunction with the main dwelling structure.
- Tiny homes usually have wheels or exist on small plots of land that have no other buildings.
- ADUs can be anywhere where there’s already a pre-existing structure, but a tiny house needs a special permit or a small parcel of land just for themselves. As a result, it’s easier to construct and approve an ADA than most tiny houses.
The laws vary and are evolving on how big a tiny house can be, but they’re generally much smaller than ADUs. Meanwhile, the size of ADUs is only constrained by the size of the land they’re on.
The cost of building an ADU depends on the cost of labor and materials. Given that an ADU is smaller than a house, you have to make the most of every cubic foot. That means an increased cost per square foot because you don’t get as good of a deal on materials. In California, the permit process alone is holding up most people building ADU’s. But, the cost like everything else is high.