ADU Cost

ADU Cost Breakdown – Financing an ADU

ADU cost analysis is one of the most important first steps that you need to take to be able to get an ADU up and running on your property. So what should you expect when you try to finance an ADU? What different options are there for you? Are certain options better than others? Should you build one yourself, or should you let a contractor do it? All of these questions are incredibly important to ask when building an ADU, and we talk about each of them so you know exactly what your best opportunities are. 

Building an ADU

When you’re looking into building a new home, one of the biggest things you need to consider is cost. Building an ADU can be complicated andfrustrating, but it is something you need to think about carefully before you leap in head first. ADUs are bit projects and shouldn’t be taken lightly. Looking at ADU costs is going to mean taking into account several different buying options, but you are the only one who will know exactly what option is best for you. 

Overall Cost

ADU costs range based on quality. However, the biggest impact on your project’s cost isn’t the building itself, its the conditions of the site. Utilities, sewer, setbacks, foundation type, etc. Once the site conditions are understood, the design of the ADU or the selection of the floor plan can begin.  The size of the ADU, the shape of it, and what rooms you do or do not decide to include in it, all impact price as well. Not to mention the interior selections and appliances. So, as you can see there’s lots that goes into pricing an ADU project, and a good rule of thumb is to do some serious homework on your property and local requirements before you get started with any designer or architect. 

Paying Outright

Suppose you have the money to pay for an ADU outright, then it’s a great idea to reach out and pay for the ADU out of pocket. There are few people to whom this will apply, but if you’re able to do so, you should. This way, you don’t have any additional loans or debt.. You’ll be able to start to enjoy your backyard home without having to worrying about finacing options..

Getting a Loan

Getting a loan is the next best step when you’re trying to get an ADU, the cost is one of the biggest hurdles, but a loan will help. You’ll need a good credit score and spending history to ensure that you’re able to actually get a loan for the amount that you’re going to need. Getting a loan is going to rely on your bank, the information you have on hand, and the different bank that you go to. If your bank denies you a loan though you’re not out of luck yet, there are still a few options that will help you get the ADU of your dreams.

Refinancing Your Mortgage

Refinancing an already existing mortgage so you can add something to your property is something people have done for years. If you’re looking to add an ADU to your property but you can’t because a loan didn’t go through or you didn’t have the money upfront refinancing your mortgage may be the best option for you. In refinancing your mortgage, you essentially promise to pay more in order to be able to financially afford to add an addition, like an ADU, to your property, helping you get the ADU you want without having to pay yourself. 


Suppose you have a close-knit circle of family or and elderly loved one looking to sell their home to move closer and downsize. It’s possible that you might be able to share the investment into an ADU. Elderly family selling their primary home to purchase an ADU on their children’s property, or vice versa, is more and more commonplace and often ends up as a win-win

Building it Yourself

Building an ADU yourself certainly is an option that would help minimize cost, but if you want it done professionally, it’s unwise to do it yourself. There are many moving parts in building an ADU, especially one that has electricity, sewage access, and other amenities. If you want to try to build it yourself, you certainly can, but it expect it to take years. Ideally you should reach out to someone who is familiar and well versed in building ADUs. Building an ADU from scratch can be a challenging project with lots of potential for potential problems. 

Hiring a Specialized Contractor

Instead of trying to do it all yourself, it’s best to think instead of hiring a specialized contractor. When you work with an ADUcontractor, you benefit  from someone who is well versed and incredibly experienced in ADU code, design, and building. Building an ADU as efficiently as possible helps minimize cost as well maximize quality,ensuring that over time you your investment grows in value.


The last part of trying to get together the ADU cost is taking time into account. If you try to build an ADU yourself, it’ll take much more time than getting an ADUcontractor to build it. Different methods of securing funds even take time, depending on the method that you’re using. Time is everything, from picking the right tie of the year to deciding what kind of financial needs you need to meet to make sure you get the right contractor on time. Always take time into consideration when you’re preparing to get an ADU installed. 
If you’re looking to get started on an ADUeach out to us at Acton ADU. We’ve permitted and built ADUs all over the Bay Area and been successfully putting families into homes for over 30 years.

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