What decides whether an ADU pencils
Rent per square foot and utility connection distance. A unit close to the main house's sewer lateral and panel can save $20K over one at the back of a deep lot. Many states now cap impact fees on smaller ADUs — check the threshold before finalizing square footage.
- • Garage conversions are usually the cheapest path to a legal unit.
- • Separate metering makes rentals cleaner but adds $3K–8K.
- • Confirm your lender counts projected ADU rent before relying on it for financing.
FAQ
How much does an ADU cost to build?
Most detached ADUs run $250–400 per square foot all-in, so a 600 sq ft unit typically lands between $180,000 and $260,000 including utilities and permits.
Does an ADU increase property value?
Appraisers in ADU-friendly markets often add 60–100% of build cost to value, and the income stream can matter more than the appraisal if you plan to hold.
Is a garage conversion cheaper than a new ADU?
Usually by 30–45%, because the slab, walls, and roof already exist. The catch is bringing the slab, ceiling height, and egress up to habitable code.
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