How Much Does It Cost to Build a Detached ADU (Accessory Dwelling Unit)?

Do you find yourself intrigued by the idea of an Accessory Dwelling Unit (ADU), musing over the potential of your backyard space? A detached ADU can be a lucrative investment, offering a plethora of benefits like income from renting it out like a single-family home or separate living space for loved ones. 

But the all-important question arises: how much does it cost to build a detached ADU?

Starting with the Basics: What is an ADU?

An Accessory Dwelling Unit, or ADU, is a residential structure that shares the same property as a primary residence. They are often built by property owners looking to expand their existing home, or generate rental income. There are two main types of ADUs: attached ADUs, which are extensions of the existing structure, and detached ADUs, entirely separate from the main house. 

Our focus is the latter, which can be constructed as a tiny house in your backyard, or via garage conversions, offering more privacy and independent space.

ADU Cost Breakdown

When it comes to ADU construction costs, the truth is, it can vary greatly depending on many factors. No two ADU projects are the same and each comes with its unique design costs, construction challenges, and customizations. However, a ballpark figure for your future value calculation is the cost per square foot. On average, you might expect to pay between $250-$400 per square foot in construction costs. That means, for a 500-square-foot ADU, your total cost could range from $125,000 to $200,000.

But remember, the devil’s in the detail and this figure can change depending on your design decisions, materials chosen, and how much of the work you’re willing and able to do yourself.

Navigation matters

Navigating the winding road to obtaining an ADU permit might seem like a daunting task, one lined with bureaucratic hurdles and paperwork mountains. It’s a process that feels filled with uncharted territories and riddled with a complex maze of regulations. But rest assured, the journey towards getting that coveted approval stamp isn’t as foreboding as it may seem. First, take a deep breath and remember that every successful ADU project starts with a single step: understanding your local regulations. Reach out to your local building or planning department to familiarize yourself with the specific requirements and guidelines that pertain to your area.

Keep in mind, patience is your ally in this venture. The permit process can be time-consuming, and it’s not uncommon for approvals to take several weeks or even months. It might seem intimidating, but this process is crucial to ensure that your future detached or attached ADU meets all safety and zoning standards. 

And remember, each tick on your checklist, each form submitted, you’re one step closer to the reality of your dream ADU, a testament to your resilience and perseverance. So, brace yourself for the journey, take one step at a time, and remember – the view from the finish line will be worth the effort.

How Much do ADU Permits Cost?

Before breaking ground, there’s the ADU permit cost to consider. Navigating the permit process can be complex. This is where your site and foundation preparation start. The permitting process can range from a few hundred to a few thousand dollars, depending on your local regulations.

Garage Conversion vs. New Construction

Garage conversions are usually more cost-effective compared to new construction, mainly because you’re using the same structure, saving on foundation. You’re also connected to the current electrical supply system. However, converting a garage to a livable space may entail costs like insulation, interior finishes, HVAC systems, and possibly increased electrical demands. 

Still, a garage conversion seems like a magic wand that will let you not only decrease the total cost, but also use the stable foundation, on which the entire structure will greatly depend.

The Prefab Accessory Dwelling Unit Option

Prefabricated ADU or prefab ADU are a popular alternative due to their potentially lower costs and shorter construction timelines. Prefab ADUs cost can range between $180 and $220 per square foot. That’s potentially a saving of up to 40% compared to a custom ADU project. Plus, a prefab ADU can often bypass the sticker shock of unexpected construction costs due to their predictable, fixed cost model. But remember, the cost of work on site and utility upgrades may not be included in the total project cost (or final cost) quoted by the prefab company.

Unexpected ADU Costs

Watch out for additional costs that may slip under your radar, like potential upgrades to utility systems, potential property taxes increase, or financing costs if you choose to take a construction loan or a home equity line. Also, if you’re not an expert, consider the potential cost of hiring professionals like general contractors or architects. 

Moreover, if you decide to radically change your ADU design and, for example, add exquisite light fixtures, you may need to borrow money as the price will vary depending on the quality of design of these items.

What is the Footprint of an ADU?

An ADU’s footprint or square footage is a significant factor in determining the cost. The larger the ADU, the higher the cost. But a larger ADU also means more potential income from rent or additional space for your needs.

Is Building an ADU a Good Investment?

The ADU cost might seem steep at first glance, but it’s important to look at the bigger picture. If your goal is to generate income from rent, consider the local rental market. How much can you reasonably expect to earn from the ADU each month? This income can offset the initial ADU costs over time.

Furthermore, the choice to finance ADUs can boost your property value. Prospective buyers often see an ADU as a bonus, a separate address that can be rented out or used for independent living. A well-designed, well-built ADU can be a great investment indeed – read more about here –

Building a detached accessory dwelling unit is a significant financial commitment, but with the right planning, it can be a fruitful investment. Do your due diligence, get the proper permits, consider your design and building options, and prepare for a transformative journey that will redefine your property, your living space, and perhaps even your financial future.

Frequently Asked Questions — FAQ 

What’s the average cost of building an ADU?

The average cost of building an ADU varies greatly depending on many factors but expect to pay between $250-$400 per square foot.

How long does it take to build a detached ADU?

Building detached accessory dwelling units typically takes between 4 to 8 months, depending on the complexity of the project, permitting, and weather conditions.

Are ADUs a great investment?

Yes, ADUs can be an awesome investment. They can provide a steady stream of rental income and potentially ADU increases your resale value.

Do I need a permit to build an ADU?

Yes, a permit is generally required to build an ADU. Permitting processes and costs vary by location and project details.

Can I build an ADU myself?

While it’s possible to build an ADU yourself, it’s recommended to work with experienced professionals unless you have significant construction experience.

Are prefab ADUs cheaper than custom ADUs?

Prefab ADUs can be more affordable than custom-built ADUs due to the streamlined building process and fewer unexpected costs. However, site work and utility costs may be additional. Even for prefab ADUs you may need to add a concrete slab foundation or 1-story ADU will no satisfy you, there will be additional work and costs.