ADU Cost Breakdown

The accessory dwelling unit (ADU) has many advantages that can improve both its overall quality of life and certain components, e.g., household or financial situation. This is an axiom that does not require proof and that all property owners know. Along with this, it is no secret that ADU is a cost-effective housing option, and this characteristic can manifest itself even at the construction stage. However, you can achieve this effect only in one case if you plan the budget for the ADU project correctly.

To succeed in competent financial planning, you need to know everything about the components of total cost. Therefore, today, we will tell you all about ADU construction costs. In particular, we will reveal which factors have the greatest impact on final ADU cost and which four groups make up 95% of actual costs. We will also talk about hidden costs, knowledge of which will help you avoid unexpected expenses.

ADU Costs & Basic Influencing Factors

A number equal to the total project cost does not appear out of thin air. Moreover, no construction specialist or project manager will also come up with it out of his head. The total amount that you invest in a new functional residential area has a completely logical justification, and a number of external factors have a direct influence on it. Final ADU cost can vary widely based on hundreds of factors, however, we will highlight only the main ones.

ADU location

If you live in an ordinary area within the city, then this point will bypass you. In all other cases, the location of your home will have a significant impact on the final ADU cost. We will reveal some of the factors that are part of the legal field later, but here we will say that if your house is in a remote area or far outside the city. Most likely, ADU development will cost more due to logistical difficulties.

ADU size

The most obvious factor is ADU cost, which any homeowner knows about even before construction begins. If you are planning to build a junior ADU or prefab ADU, then it is obvious that it will cost you less than a garage conversion of 1200 sq. ft. or a two-story pool house. In addition, to implement large projects, you will need to spend more on materials, legalization, and plan development.

Initial ADU condition

Some builders say that upon arrival at the site for the implementation of the ADU draft, they find the existing structures in terrible condition and this factor also affects the total amount of ADU cost. In particular, this is especially relevant for garage and basement conversions. If the room is covered with rust and mold, its walls and floor are rotten, and the roof resembles a sieve but not a roof, then such a project will cost many times more than refurbishing a garage or basement in good condition.

Types of Utility Connections

This point about final ADU cost is a continuation of the previous one, however, now we will touch on the topic of utility connections. What do you need for a comfortable stay in ADU? Properly maintained plumbing and electrical wiring, high-quality insulation, as well as modern ventilation. If the living space that the builders convert into an ADU does not have these components of the life support system or they need to install them from scratch, then ADU costs automatically increase.

Design complexity

Finally, there is another obvious point that many people forget about. Homeowners often dream of the most unusual ADU configurations, such as a big detached unit with an attic, wine cellar, home office and library. However, with each new design trick, the complexity of the ADU configuration increases, as well as the final cost. Of course, builders can bring any idea to life, but it is crucial to remember this simple dependency.

Just as it is impossible to single out any one key factor from the above, it is unrealistic to name the exact number of ADU costs. This is because there are at least four main categories that form the amount that you will spend on ADU development. We will tell you more about each component below.

ADU Design Costs

The word “design” in the title to this part may cause you a little confusion, does the analysis of the total cost of ADU construction begin with the interior and exterior? Of course not, because when we talk about design, we primarily mean planning the concept of the future accessory dwelling unit.

This first step in the overall ADU development process includes obtaining the following important documents:

• Architectural plans. It is impossible to build an ADU based only on abstract sentences and ideas. Builders need to see in front of them the drawings and plans that architects prepare for them. After studying all your preferences and suggestions, they will prepare accurate drawings of the future living space with a description of each square foot.
• Calculations of energy consumption. Different types of ADU consume different amounts of energy and already at the planning stage it is critically important to know which life support systems are necessary for a comfortable stay, specifically in your case. To do this, specialists perform calculations of future energy consumption, and during construction, craftsmen, using these calculations, carry out the necessary construction work.
• ADU construction calculations. When it comes to building an ADU, it is crucial to understand not only the overall architectural concept, but also the dimensions of each component of the living space, from the diameter of the hole for the electrical wiring to the height of the baseboard in the bedroom. All these measures are the responsibility of the engineers, who will “disassemble” every square foot of the future project into detail to avoid inconsistencies during the ADU construction.

As you can see, the preparation of these materials is the prerogative of specialists of three different profiles, each of whom charges a different amount of money for their services. In addition, planning costs may vary greatly depending on the configuration and design complexity of your ADU. However, if we bring the values to the average, then the design and planning of a new additional living space will be in the range of $5000 to $15000.

ADU Permit Costs

In the process of achieving any goal, whether it’s getting an academic degree, winning the basketball championship, or successfully implementing the ADU project, one-step plays a key role that moves you toward your cherished dream. In the case of ADU construction, you must obtain a construction permit, as after you get this paper in your hands, all doors and horizons will be open to you. In this regard, it is not surprising that such a significant step forms a separate expense item in the overall ADU costs.

In particular, the final permit cost consists of the following parts:

1. Building permit fees. The construction of all types of accessory dwelling units is not possible without obtaining a special permit. This simple rule applies to any configuration, whether we talk about attached, detached, or garage conversion ADUs. The construction permit includes all the restrictions of the living space, the maximum permissible dimensions, and, in principle, the requirements for each square foot of the future ADU. Therefore, this document is of legal importance.
2. Electrical system permit. The layout of your new detached ADU in the backyard or garage conversion ADU can be practical, functional, and cozy, but without connecting the living space to life support systems, it simply makes no sense to talk about comfort. However, without special permission, you cannot connect the ADU to the electrical unit of your home or city substation. Local authorities need to know how much electricity is enough for your ADU operation and for what purposes you will use electricity. Only after analyzing this information and paying electric fees can you provide the accessory dwelling unit with electricity.
3. Plan check fees. Together with your architect, you can develop a detailed plan for the ADU project. However, this draft will be invalid without legal assurance. To legalize construction, you will also need to pay plan check fees to the local planning department, which specialists will carefully examine the floor plan for compliance with all standards.
4. Household location fees. As we noted earlier, the location of your ADU also has a direct impact on total cost and on obtaining a construction permit. For example, if your property belongs to an area of historical significance, a coastal zone, or an area with an increased risk of earthquakes, then it will be a mandatory step to issue a separate permission.
5. Additional legal fees. The issue of legalizing an ADU project never has fixed costs because each story is unique. In this regard, be prepared to pay additional fees, e.g., to re-register an address or settle an ADU development issue with your neighbors.

Overall, the average costs of ADU construction permits are about $4000 — $10000. However, we have listed only the main points for obtaining a construction permit. In addition, the homeowner is highly likely to pay separately, for example, general contractor fees or impact fees. In order not to get confused in all the legal subtleties, be sure to hire a lawyer. A lawyer knows not only all the local building codes but also guides on the financial part of the legalization of ADU projects.

ADU Construction Costs

The ADU construction phase is the largest and longest one. It is all the more surprising that when talking about costs at this project stage, there is no need to conduct an in-depth analysis of the components, as all costs fit into two elements, namely, material and construction cost items.

Nevertheless, here are some crucial points about construction costs you should know anyway:

• Construction costs do not have a fixed tag, because each ADU contractor sets its own price list. There are two options using which general contractors can calculate construction costs, in particular, hourly payment and payment per square foot.
• Paying less per square foot does not mean better, since the best indicator of adequacy of labor costs is the quality of the final work. Therefore, it is extremely important to find a middle ground, not to save on labor costs, but also not to overpay.
• A simple dependency is that the larger the ADU size, the greater the overall cost, but there is one remark. In the construction industry, the larger the ADU format, the less you pay for construction work per square foot. It is essential to take this into account when forming a budget.
• There are a number of construction works that do not fall under the category of “calculations per square foot”, for example, installation of plumbing or electrical wiring. Most often, the ADU contractor sets a fixed price tag for such services.
• There is a clear distinction between building an ADU with zeros and retrofitting. In particular, if you want to build an additional unit from the foundation, then be prepared to pay for its construction in the range of $220-$400 per square foot. If we are talking about basement, attic, or garage conversion ADU, then the price tag goes down to $150-$220 per square foot.

Speaking about material costs, one point is also critically important. Of course, you can open the construction store’s website or visit it in person to form a complete picture of material costs. However, if you hire a team of professionals to build an ADU, then you do not need to conduct such research, as craftsmen purchase materials from partner companies, thereby helping save money on construction.

ADU Interior & Exterior Costs

Creating the interior and exterior of ADU is the final step in the draft implementation. This stage includes tasks such as installing new windows and doors, laying flooring, decorating walls with paints, wallpaper, or tiles, and installing new furniture and various decorative elements. Each of these points makes a separate contribution to overall ADU costs, however, calculating each part separately would take you and us dozens of hours.

For this reason, general contractors set a fixed price for works that relate to finishing touches. Often, finishing residential premises with various materials costs homeowners $50-$70 per square foot.

Overall ADU Cost & Project Payback

We come to this part at a time when you know enough about ADU development costs to understand that you will have to invest a substantial amount of money to successfully complete the construction. At this stage, some homeowners have doubts about the profitability of the ADU project campaign. However, there is no reason for these hesitations.

If you decide to build an ADU, then you do not need to spend nights calculating ADU costs because this project will bring you many more benefits:

• Boost in property value. Entering the general contractor office, the first question that homeowners ask is, does an ADU increase property value? Often, the answer to this question outweighs any ADU expenses that you will spend on construction. The appearance of an ADU on the same site with an existing structure can mean only one thing, namely, a multiple increase in the resale value of your property. On par with this, the more time it takes since the ADU draft completion, the more money you will obtain in case of a house sale.
• Potential rental income. However, increasing the value of the entire property is far from the only way to recoup the overall cost of ADU construction. The secret is that regardless of the purpose of the ADU construction, the final configuration will be suitable for rental goals. Moreover, the comfort and technology of ADU make this living space a higher priority choice than hotels, motels, or apartments in skyscrapers. In turn, this leads to the simple conclusion that the demand for ADU rentals never drops, as does the flow of rental income to your bank account.
• Guest house functionality. One of the most common configurations of ADU is a guest house in the detached unit or garage conversion format. You will say that such an ADU performs primarily an entertainment function during holidays with friends and has no relation to the payback of overall costs, however, this is not the case. The main purpose of the guest house is to provide housing for aging parents, and this is a huge saving due to the absence of the need to pay for a place in a nursing home.
• Household problems’ solution. Many homeowners build an ADU to solve everyday problems and this cation has its own logic. If, as part of the implementation of the ADU project, you create an energy-efficient laundry room, then you instantly solve all the pressing household difficulties, optimize most household processes and at the same time save on utility bills. In the long run perspective, these savings will have a positive impact on the family budget.
• Home office for remote work. All people who work remotely know that the existing space in the main house is the worst place to work. Working in conditions of constant noise and shouting, it is impossible to dismantle good performance and earn more money. In contrast, your detached or attached ADU can be the perfect office with the best sound insulation, a layout that suits your requirements, and space for breaks. It is hard to imagine more comfortable conditions for effective work.

Studying these points, it is very easy to come to the conclusion that homeowners do not need to cut ADU costs during the construction process, redistribute costs or abandon some ideas in favor of saving. This is the main uniqueness of the ADU, regardless of how much you spend, the operation of the new ADU will help you recoup all construction, permit and overhead costs.