The Ultimate Guide to the Cost of Accessory Dwelling Unit

How much can you expect to pay? Every ADU is unique and there are factors like location, zoning laws, and utilities that will come into play. It’s impossible to provide a one-size-fits-all cost of accessory dwelling unit construction. The best way to find out how much you can expect to pay for your accessory dwelling unit is to start the planning process with your builder. However, we’re here to help you make sense of the facts and figures you’ll receive.

Read on to learn more about what impacts the cost of an accessory dwelling unit and more. Keep in mind that financing options are always available to make your ADU planning more accessible.

Site Work and Utility Upgrades 

While ADUs are typically much smaller than the primary residence, they still require land clearance and preparation. For homeowners with clear, flat backyards, this won’t amount to much in terms of additional costs. However, if you need to clear trees or brush, or level out your backyard, this will cost more in both money and time.

ADUs often require utility upgrades, as well. You will likely need to extend your plumbing and electricity to accommodate the new house. How much this costs will depend on a variety of factors including how far the ADU is from the primary residence and the condition of your yard.

If you’re living in an older home, you may also need to cover the cost of upgrading your electrical panels. A 100-amp electrical panel is standard in older homes and may not support the added electricity use of new appliances. (Remember, even a small ADU will have its own refrigerator and possibly its own washer and dryer, too.)

Size

Naturally, the size of your accessory dwelling unit is going to impact the overall cost of construction and maintenance. It is feasible that a large attached dwelling unit could cost more than a small detached dwelling unit. But, be wary of any builders that claim that detached ADUs are inherently the more expensive option. Modifying an already completed structure can create complexity in engineering needs, as well permitting. Generally, detached units are far more straightforward projects, not to mention many homeowners prefer them as investments.

When designing your accessory dwelling unit and thinking about size, it is important to consider your local zoning laws. 

Personalized Build vs Pre-Approved Build

One way to lower the cost of your ADU is to opt for a pre-approved design plan. A pre-approved design plan has already been approved by the city in which it is being built. This reduces the time required to gain permits as well as design costs. However, pre-approved plans can’t be modified.

With pre-approved design plans, you don’t have to do the work to make sure that your design complies with local zoning laws. If a personalized build is important to you, it is certainly worth the additional time and money. It’s important to keep in mind that the additional out-of-pocket costs will go up for a personalized build design.

Interior Finishes

How do you intend to use your ADU? When it comes to budgeting for interior finishes, it’s helpful to think about how often it will be in use and, therefore, how much wear and tear it will undergo.

If someone will be living in your ADU full-time, you may want to invest in higher-end appliances, furniture, and flooring. Not only will these look nicer but they’ll also withstand more use before needing repairs or replacements.

If, on the other hand, you’re designing your ADU for intermittent use, you can consider saving a bit of money on interior finishes. For example, sourcing appliances from big box stores like IKEA or Lowe’s will cost less than custom or top-of-the-line brands. You can also start with low-cost interior finishes and upgrade over time when you start to accrue passive income.

Are Accessory Dwelling Units a Sound Investment?

One thing to keep in mind, when assessing your ADU budget, is the potential ROI it will yield. Many value-add renovations come with the risk that they will not, at some point in the future, make a tangible impact on the value of your property. An accessory dwelling unit, however,  can substantially increase your property value if it is high enough quality. First, let’s address the value-add of an accessory dwelling unit. Accessory dwelling units increase the square footage of livable space on your property. This is one of the few renovations that will always add value regardless of the state of the housing market at any given time.

Second, let’s talk about ROI. Many people use their ADU as a “granny house” or “mother in law suite,” providing a safe space for older relatives to live. Given that assisted living costs an average of $4,300 per month (even more in the San Francisco Bay Area), an ADU is a cost-effective alternative for eldercare.

Finally, developing an ADU on your property does provide the potential for passive income. Owning an independent living space that costs less to maintain than, say, a single-family home is a great way to generate retirement income or increase your current assets.

Let’s Talk About the Cost of Accessory Dwelling Unit Construction

What do you plan to do with your accessory dwelling unit? What kind of budget are you working with? The cost of accessory dwelling unit construction is subjective, and we want to help bring your ADU goals to life.

To find out more about how Acton ADU can help you to build and finance your northern California ADU, contact us today. We’ve been constructing ADUs for years and will always prioritize your budgetary needs.