How Much Does a Granny House Cost? A Closer Look
Believe it or not, national home prices rose by 19 percent in the last year.
This is great news for homeowners but tough for people looking to purchase a home! Especially in the Bay Area. In addition, many homeowners aren’t ready to sell and prefer to remain on their property because of family, school districts, and convenience.
If you have older parents or grown children, you may be considering the value of adding an accessory dwelling unit (ADU) to your property. It can provide an excellent addition to your living space without requiring you to move.
Yet how much does a granny house cost, and is it worth it to build one?
Let’s take a look.
The Value Of A Granny House
Many individuals have built ADUs in recent years, and for good reason. Traditionally, granny flats were used to provide housing to older relatives. They allow them to maintain independence while remaining close to family in case of an emergency or required assistance.
However, recent years have seen the emergence of the “boomerang kid.” And with housing prices skyrocketing, many adult children are coming to live at home for a time while they save up and start careers. An ADU allows them to have privacy and an independent lifestyle that includes their own kitchen and bath while remaining on your property.
An accessory dwelling unit can also provide a separate home office if you have begun a hybrid or work-from-home schedule. It’s a quiet space that’s free from distraction. Your ADU can be converted for other uses as your family grows and changes.
For example, creative types may enjoy having a separate space for dancing or creating art. Or you may want a man-cave or she-shed that allows you to escape hectic family life.
In addition, an ADU can increase your home’s value by up to 35 percent. Much will depend upon your local market and the size and type of unit you choose. For instance, a high quality ADU in San Jose, California can add substantial value to your property.
However, prospective buyers know the value that an independent dwelling unit brings to a home. They can save a great deal on assisted living costs and other expenses in the future.
How Much Does A Granny House Cost?
The actual cost will depend upon a number of factors, including the site condition present on your property, the overall architecture and design, size, interior finishes, city permits and fees, and the quality of the construction and materials.
Some individuals choose a simple unit, but others may choose (or require to do to their property’s layout/needs) a more personalized build that includes a modern kitchen and bathroom. Marble countertops and hardwood floors will last a long time but add to your expenses.
You’ll also need to think about things like plumbing and electricity installation. It’s possible to tap into the resources used in the main house, but you will probably need to do some interior work that could add up.
You’ll also need to factor in the costs of furnishing and decorating your granny flat. If you plan on having a relative live there long-term, you will need a bed and sofa. If you are thinking of using your unit as a guest house, you may want to make sure it’s tastefully appointed.
What Are The Benefits Of An ADU?
Many older folks prefer an ADU arrangement over assisted living or other options. They would rather be close to family than strangers, and they like being able to cook their own meals and maintain a small garden.
ADUs are also a great way to support the environment, as they require less energy to build and maintain than full-sized homes. They also use fewer resources for heating and cooling.
In addition, an ADU allows homeowners to acquire additional living space for their families on land they already own. Getting an apartment or home for adult children, for example, could require them to pitch in financially. In that sense, an ADU could mean money savings in several ways.
ADUs are also quite flexible. You could start off having your college-aged kids live in one while they are on break, and switch it to an older parent house later on. Or you could plan to move into it yourself one day if the children take over the house.
How Can I Afford An ADU?
In the end, an ADU may be a worthwhile investment because of the money you’ll save and the value it will bring to your home. However, building one initially may require some creativity.
If you don’t have enough money in savings to build the unit, you may be able to talk to your preferred construction company about financing options. ADU specialists will likely have partners that offer a variety of financing options.These allow you to pay your home off a little at a time, making payments more manageable.
You could also take out a home equity loan. These allow you to borrow a fixed amount of cash against the equity you have in your home. In today’s hot housing market, you could cash in on some of what you’ve made on your investment without leaving your home.
Similarly, a cash-out refinance will allow you to borrow up to 80% of your home’s value. You can use the money for construction as well as any other expenses, including furniture.
It’s also possible to take out a construction loan, which allows you to borrow against the future value of your home. Bank loans and credit cards are other possibilities. Though construction loans on ADUs are generally more expensive and take longer to actualize than other options.
Your Accessory Dwelling Unit
How much does a granny house cost? Much will depend on where you live and the type of home you need to build. However, the right unit in a good location can seriously improve your home value for years to come.
Don’t stop getting smart about ADUs now. For experts in your area, contact us today.
