Once upon a time, most Americans didn’t entertain the notion of other people living on their property. But times are changing.

What if we said you could undertake a home improvement project that would boost your home value, generate income, and even bring your family closer? We’re talking about granny flats.

Of course, if you’re looking to build a granny flat, you’ll need the right granny flat builders for the job. Here’s everything you need to know before starting your project, and eight tips that will help you find the best contractor.

What is an Accessory Dwelling Unit?

An accessory dwelling unit (ADU) is a secondary housing unit occupying the same lot or structure as a primary residence. The primary residence is typically either a single-family home or a duplex.

In plain English, it’s an extra living space on your property that may or may not be attached to your house.

They’re also referred to as:

  • ADUs
  • Granny flats
  • In-law units/Mother-in-law units
  • Secondary units
  • Backyard cottages
  • Accessory apartments
  • Live-in garages
  • Carriage houses
  • Basement apartments
  • Attic apartments

But whatever you call them, granny flats offer a living space apart from your main living space. More specifically, a second, fully habitable and independent house on your property, but smaller.

To be clear, an ADU is NOT a second bedroom, not an addition, or spare room with a hotplate. ADUs are fully-functional secondary homes.

However, these units cannot be purchased separately from the main unit, since the construction of the secondary unit does not result in or require subdivision of the original lot.

Many municipalities do not allow ADUs to be occupied unless the primary property is also occupied. But this usually dependent upon your city regulations. You can’t move out of your house and become an absentee landlord, nor can you sell your house to someone else who plans to do the same thing, generally.

Types of ADUs

As their many nicknames imply, granny flats can be used for a huge variety of purposes. However, structurally speaking, there are three types of flats:

  1. Detached structures
  2. Attached internal apartments
  3. Attached external apartments

Detached structures are completely separate from the primary residence, with no structural connection between the two, and the most popular. Attached internal apartments have shared or separate entrances with the main residence, but often have slower approval processes and unseen costs, and attached external apartments are linked to the main structure but have separate entrances.

Detached

Detached structures are the classic carriage house. If you’ve ever seen a tiny house in someone’s backyard, that’s a detached granny flat.

It’s a separate building unit whose sole purpose is to provide additional living space. Pay attention to that qualifier--your detached garage doesn’t count as a detached granny flat unless you renovate it into legal and habitable space. Detached flats can have a secondary purpose, but their first purpose must be for human habitation.

Also, detached units must rest on foundations. An RV, mobile trailer, or wheeled tiny house doesn’t count as a granny flat.

Detached structures offer a refreshing level of independence. The person in the structure could completely avoid interacting with residents of the main house and carry on living their life, or they could be as close to the main house as they please.

Attached Internal Apartments

On the other end of the spectrum are attached internal apartments, which are fully integrated into the original house. They’re so integrated that an outside visitor may not initially be able to tell that there’s a separate unit.

These units are not necessarily the easiest (and cheapest) as there are some hidden costs that can come up if the existing unit needs some structural changes. The advantages, however, are that you can use the main house’s utility hookup and take advantage of the original structure. Many of these units are in the basement or attic.

On the other hand, this can also make them less attractive to would-be residents, since they don’t have any of the independence afforded to detached units. Some potential residents may not like the feeling that the primary homeowners can be in their business with a simple trip up or down the stairs.

Attached External Apartments

Attached external apartments are a happy medium between detached units and attached internal units. Almost always, the decision to attach or detach is based on what is legal from a Floor Area Ratio or other jurisdiction requirements for the property.

Internal units can be tricky because they are the least common and most complicated, and cities don't like them.

They’re not completely independent from the main house (they have to share at least one wall with the main house to be considered attached external units, which must meet all of the firecodes). All ADUs that Acton ADU builds shares the home's utility connections. This is considered a major benefit, so that you don't have to wait for your utility provider to approve a new connection. Sometimes, this can take up to a year, or have the added fee expenses of connecting a totally new set of lines.

This independence also applies to the practical side of things. The cost of setting them up utilities is usually lower than detached units.

Benefits of a Granny Flat

Why go to so much trouble to set up another living space when you already have one?

Well, for one thing, there’s a critical shortage of affordable housing in the United States. And while that may not seem like it affects you, as a homeowner, it can still affect your family members.

And with the cost of living rising at its fastest rate in 10 years, you’ll still feel the bite of the housing crisis in your wallet every month.

A granny flat is an investment, yes, but there are several key benefits for homeowners like you.

Housing Elderly Family Members Independently

Granny flats get their name from one of their most popular uses: independent housing for elderly family members.

Think of your elderly loved ones. You adore them and you’ll make it work if you need to take care of them, but the fact remains that eldercare isn’t cheap. The cost of a single semi-private room in a nursing home is nearly $7,000 per month. An entirely private nursing home is closer to $8,000, even as high as $12,000 depending on your location.

Also, a nursing home is deeply distressing for many seniors. They’ve spent their entire lives living as independent adults and many of them justifiably resent the notion of a nursing home, where they’ll be treated like a child who cannot make decisions on their own.

If your loved one has dementia or cognitive problems, a nursing home can be even more distressing, since they don’t know where they are and no amount of explanation will make it better.

ADUs offer a humane, hands-on (but affordable) approach to caring for your loved one. Seniors who cannot live alone, but can still handle a degree of independence, can stay with their loved ones while still carrying on their own lives. If your loved one has dementia, you can keep an eye on them while still giving them a safe space to retreat to and even design the ADU to be a safer environment

Low-Cost Housing for Boomerang Kids

On the other end of the spectrum are your kids, who can benefit from the safety net that an ADU provides.

Young adults subject to the ebbs and flows of an increasingly vicious job market may not be able to find employment and affordable housing in the same place. Or, if you’ve got a boomerang kid (i.e. an adult child who just finished college, looking for a job, or just getting started at their life) may not be able to recuperate their student debts while paying for housing with their current job options.

For boomerang kids (and their parents), ADUs are the best of both worlds. They can take advantage of affordable housing and get ahead of their student debt while they figure out employment.

In the meantime, parents can help their kids get both feet on the ground and keep the family together while still investing in the family’s future. It’s a way of helping them out without sacrificing their independence since they aren’t moving back into their childhood bedroom.

If you have adult children who can do productive work but can’t live alone due to special needs, chronic health problems or developmental issues, ADUs are a helpful medium. They can retain a level of independence but still receive the support they need, while offering you, the caretakers, privacy as well

In-law Breathing Space

Are you one of those people who dread the prospect of your next visit from the in-laws? Are one of those people who love your in-laws dearly but need a little bit of breathing space? Many families want to be close, but not too close.

ADUs can come to the rescue, whether your in-laws are staying for a long visit or just staying the night.

You’re both used to keeping your own schedules and you know what you like. ADUs allow you to spend time with each other while still having your own space to retreat and recuperate (or just get a good night’s sleep if you keep different sleeping schedules).

Rental Income

Of course, your family isn’t the end-all-be-all of granny flats. Remember the affordable housing crisis we mentioned earlier? That means there is demand for quality housing.

It doesn’t just affect you. There’s a significant population that’s looking for affordable housing options without moving back into their childhood bedroom or commuting from far away.

If you need a little extra space in your budget, granny flats are win-win investment properties. Someone else gets affordable rent and you get a steady stream of passive income.

Alternately, if you don’t want to give up your unit to a renter for months or years at a time, you can also rent it out short-term with Airbnb, Homeaway, Vrbo, or other vacation rental sites.

Just make sure to check out regulations in your local area--Airbnb and other short-term rental regulations vary by jurisdiction.

You can even collect informal rent from your adult kids or elderly relatives (if your elderly relatives are resistant to the idea of living on your property for free). Just make sure to have a conversation about expectations.

8 Tips for Hiring Granny Flat Builders

If granny flats sound like a worthwhile investment, it’s time to do your homework.

Granny flats are somewhat unique in that they may not be a completely independent structure. Builders may have to account for the existing structure and wiring of your primary structure and the unique qualities of the property itself.

Conversely, if you’re building a completely detached property, builders will have to figure out how to design and wire a completely new structure based on the property you have available. This requires experience, a good eye for design, and a clear understanding of the legal requirements attached to granny flats.

So if you’re planning to build a granny flat, you’re going to need expert granny flat builders. Here are eight tips that can help you find the right contractor for the job.

1. Get Recommendations

Your first step is to look for recommendations.

Friends and family are a good resource on this front. Talk to people who have done significant remodeling projects recently. Ask who they worked with and what their experience was like. Your goal is to create a list of potential contractors. Not always easy for ADUs, but worth a try.

If you don’t know anyone who has done remodeling recently, check with the National Association of the Remodeling Industry for a list of members in your local area who can validate their experience with ADUs. Even if you get a list of contractors from loved ones, check their accreditation here too, make sure they are insured, and keep a list of options to interview

City planning departments and building inspectors can also provide some help. They work with lots of contractors, and will likely be able to provide the names of ADU specialists that they’ve worked with.

2. Interview Contractors

Once you have a list of contractors with solid credentials, it’s time to interview.

Start by calling all of your prospective contractors with a list of basic questions. Here are a few to keep in mind:

  • Do you have extensive experience with ADUs?
  • What is their experience working with projects like yours?
  • Do they provide design, structural engineering, and permitting services?
  • What don’t they provide that you’ll need? (utilities, foundations, warranties, etc.)?
  • Are they willing to provide references?
  • How many projects will they have going at the same time?
  • What subcontractors do they use? How long have they worked with them?
  • Can they provide a list of their previous clients when it makes sense?

You’re trying to suss out the company’s experience, availability, and reliability. Trust your gut on this--if a contractor gives a weak answer or isn’t willing to provide verification, move on.

If a contractor cannot provide references or reviews that’s usually a red flag that they don’t seek out reviews from their customers, or their customers are unhappy and glad to be done with them.

And never pay a contractor too much upfront, no more than 10% of the agreed upon project.

3. Ask the Right Questions

This face-to-face meeting is another interview, so come prepared with questions. It’s also an opportunity for a contractor to take a closer look at the project and provide a path forward.

Tell them your ideas for a granny flat and ask how they would meet your requirements. Ask if they can foresee any issues with the project (ideally, you should have already done your homework on a few potential problems). You should also ask how they’ll design it to comply with regulations (do your homework on regulations first so you can fact-check their statements).

You should also ask about their licenses, available guarantees, and permit processes. Some contractors will get a permit for you and work with utility companies directly, while others expect homeowners to handle this. Acquiring permits for an ADU is also a specific process and entirely different from a home remodel or even a new home.

Don’t be afraid to ask big questions, either. Why should you trust them to build your ADU? What are you getting for your money? And know what answers your looking for. Are you looking for experience? Quality?

You’re making a big investment. You want to make sure that you make the right one, because not all ADUs are made equally. There are big leaps in quality and value depending on how you proceed and learning as much as you can upfront can really set your expectations and help you select the right partner..

Go through this process with a few contractors so that you can compare estimates.

4. Connect with Former Clients

Good contractors should provide a few former clients you can talk to, preferably three recent clients. But know that many contractors don’t like to pester their customers all the time, so usually this is the last step before making a decision.

Think of it as getting recommendations, but more tailored. Contractors who do a good job will inevitably have clients who are willing to speak to that work.

Ask those clients about their experience working with the contractor. Did the contractor finish the project on-time and on-budget? What was communication like? What issues came up, if any? Were there any surprises during the project, good or bad?

You’re looking for a contractor whose clients give overall positive reviews (ideally a contractor whose clients are enthusiastic in referring them to new people). Keep in mind that everyone’s experience is different and that a contractor will usually refer you to their happiest clients.

That said, you can still get a decent idea of the experience the contractor provides to their clients.

5. Evaluate Their Proposal

If you like what you hear, you’re ready to evaluate the contractor’s proposal.

Comparing proposals can be tricky, though, so be prepared to dig deep. If you have no clue what you’re looking at or what to look for, recruit a knowledgeable friend or family member to help you out.

In general, you’re looking for a few key factors:

  • The scope of work
  • The cost
  • Any exclusions

The scope of work should be consistent across proposals. If there’s a major outlier, discard it.

Cost is a big consideration, but keep in mind that you get what you pay for. Be wary of contractors who low-ball it--they will very likely upcharge you later. You should also be on the lookout for surprise costs in the form of exclusions. This is important with ADUs and common exclusions are: design fees, structural engineering, permit fees, city fees, utility connections, and even foundations. And in the case of excluded labor or materials, that will cost you further down the line.

Keep your budget in mind, but ask yourself if paying a little extra for good quality, on-time work will reduce your stress for the duration of the project.

6. Negotiate

At this point, don’t be shy about going back to your contractor to talk about options and alternatives for things like size, finishes, and features that are an additional expense: like lofts, vaulted ceilings, etc

Ask them to clarify certain choices in the estimate. If they low-balled certain estimates, ask them what would happen if that low-ball estimate didn’t pan out--what kind of price jump would you be dealing with?

Also, ask how they would handle it if the project ran into issues. What happens if the project runs over? What happens if they miscalculate on materials? What are their systems for corrections?

This is also a good time to ask about your options. If you’re on the fence about some elements of the project, ask how the estimate would change if you tweaked certain things.

You want to find a contractor who’s willing to meet you in the middle and make it work, so long as you’re willing to make changes

7. Set a Schedule

From there, you’re ready to set up a schedule.

First and foremost, talk to your contractor about the project schedule. Ask them to flesh out the details of how they’ll manage the schedule. ADUs have long permit cycles and staying on schedule is important. What happens if something isn’t done on time? Will they go the extra mile to get caught up? Or do they prioritize getting out of your way when the allotted work hours are over?

This is also the time to ask about (and set up) a payment schedule.

Payment schedules tell you a lot about a contractor’s ethics and financial status. Contractors who want you to pay half of the bid up front may have financial problems--run in the opposite direction. Never pay more than 10% when you start a project.

Most contractors working on large projects have a payment schedule that starts with 10% of the bid due at contract signing. From there, you’ll pay installments evenly spaced over the duration of the project. The final payment is due when the project is completed.

8. Get it in Writing

Finally, make sure to get all of it in writing.

Before you spend a dime or let a single worker pick up a hammer on your premises, you should draw up a contract detailing every aspect of your project. You should have a work schedule and payment schedule with deadlines.

You should have proof of insurance and a requirement that the contractor will obtain lien releases from all suppliers and subcontractors (this will protect you if your contractor doesn’t pay their bills).

This has nothing to do with mistrust. It’s about clarifying your expectations and making sure that both parties are agreeing to the same project from the outset.

Looking for the Best Granny Flat Builders in San Jose?

If you’re looking for the best granny flat builders in San Jose, you’ve come to the right place.

We know that you’re taking on a major project, which is why we’re here to help you learn the process and make informed decisions. If you want a taste of our work, check out our portfolio. Or, if you’re ready to take the plunge, get in touch today to start the conversation.