OVER TIME, THE ADU WILL PAY FOR ITSELF, SOME IN AS LITTLE AS 3-5 YEARS.
2. Increased property value Building an ADU is no small task. Design, permitting, and construction costs add up. However, over time, the ADU will pay for itself, some in as little as 3-5 years, depending on the
type of ADU that is developed. Using the basic framework below, you can determine which ADU option is best for you and if the numbers make sense:
Ex. A) Lives in the house and rents out the ADU
Ex. B) Lives in the ADU and rents out the house
Ex. C) Rents out the ADU and the house
ADU construction cost
Including value of ADU
ADUs have more advantages than disadvantages, especially in urban infill neighborhoods where walkability to amenities is plentiful and renters typically pay higher rents. Other rental housing development requires land acquisition, and that dirt is typically the most expensive part of housing development. Since they are being developed on ‘free dirt’ you already own, ADUs tend to make
the most financial sense to develop on more expensive infill properties where the land values are highest. Consistent rental income and two livable units are a great combination for buyers who are willing to pay higher prices for a home that can meet various lifestyle needs over the course of ownership.
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