How Much Does an ADU Really Cost? [2024 Update with Prices]

The popularity of ADU is not unknown to us. A secondary structure built on the same primary residence or plot is surely worth having. A great place to rent or move in, an ADU serves many purposes. It can be used for work purposes, multi-generational living, or for renting and creating a side income. 

Available in various sizes and designs, these can be made from many materials and are durable structures. There is often a query regarding how much an ADU costs. But that is determined by many factors taken together. 

Be it the materials, location, customizations, additional features, or local zoning rules, all determine how much an ADU costs. The cost as well as functionality of the ADU vary as per preferences and requirements. These are very versatile and multifunctional options that help in enhancing the overall value of your property. 

Be it the architectural appeal or the varying styles and patterns, ADU offers a lot! However, knowing how much an ADU costs is surely a concern worth tackling. Let us break down every query further and get to know how much exactly an ADU costs! 

Types of ADUs and Their Costs 

We may wonder how much an ADU costs. Here are some common types of ADUs with their costs estimated on a general basis. 

Detached ADUs 

These are standalone structures that are separate from primary residences. These can be built in the backyards or some other place on the property. These are small houses that have entrances, kitchens, bathrooms, and living areas. 

Cost of detached ADUs: These ADUs tend to be expensive as they need independent construction and utilities. These can range from $150000-$400000 or more, depending on size, layout, features, etc. 

Attached ADUs 

These are extensions to primary residence. These share at least one wall with the main house. However, they may have separate entrances and utility features to use. 

Cost of attached ADUs: The cost for attached ADUs is generally less expensive but can increase if complete renovations or constructions are needed. They may range between $80000-$240000 or more. 

Garage Conversion ADUs 

These ADUs are created by converting an existing garage into a living space. These are popular in urban locations where space is limited and garages are often underutilized. 

Cost of garage conversion ADUs: These are more affordable as new structures are not created but rather existing ones are upgraded. The costs can range between $50000-$150,000 or more depending on features, size, design, materials, etc. 

Interior Conversion ADUs 

These ADUs are created by converting an interior part of the existing residence, like an attic, basement, etc., into a living unit. They use the existing structure of the house while adding additional and separate entrances, bathrooms, kitchens, etc. 

Costs of interior conversion ADUs: These ADUs are the least expensive ones because they use the existing structure and need less construction. But if you add more features and add-ons, the city may certainly increase. These ADUs cost around $30000-$120000 or more. 

Factors Influencing Costs of ADUs 

The costs of ADUs may vary from place to place, depending not only on location but also on several important factors. 

• The size of the ADU is an important factor that influences the cost of it. Larger ADUs require more labor, materials, and utilities. The cost therefore increases accordingly. 
• The design and complexity of ADUs also influence their costs. Custom designs with unique features are more expensive than basic ones. Similarly, complex structures and interior finishes are very expensive. 
• Different types of ADUs have varying costs. Detached ones are more expensive than attached or converted ones. This depends on the amount of construction and labor involved for the same. 
• Location is also an important factor, as site preparation, accessibility, and conditions require various costs and expenses that have to be met. 
• Local zoning rules and building connections also need permits and some fees. This varies from place to place and highly influences the overall cost of an ADU. 
• Along with construction, labor costs also vary from one place to another. This is also an important factor in determining the cost of an ADU. 
• The quality of materials and sustainability options one goes for also influence the costs heavily. The more good quality and demand, the more the costs. 

Financing Options for Investing in ADU 

Financing ADUs can be a tough task to tackle for homeowners. But there are many easy-to-avail financing options, which makes the hassle go away with ease and convenience! However, it is important to know that each financing option comes with its own advantages and disadvantages. It is important to choose by carefully considering them thoroughly. 

Home Equity Loan 

• It is also known as a second mortgage and allows individuals to borrow against the equity they have in the primary residence. It has a fixed term and fixed interest rate. 
• However, failure to repay the loan can cause a loss of your home. 
• It is best for those who prefer fixed-term equity contracts. 

Home Equity Line of Credit (HELOC) 

• It allows homeowners to borrow money as needed in exchange for home equity. It has a pre-approved limit, and one has to pay rent only for the amount that is borrowed. 
• It's a flexible option but can have varying interest rates, which may increase over time. 
• It is best for people who need flexibility in accessing funds for their ADU projects. 

Cash-out Refinance 

• It refinances your existing mortgage to a higher amount and takes the difference in cash. The extra cash can then be used for your ADU projects. 
• It has significantly low interest rates and is also a single loan payment. But it also has some closing costs that need to be taken care of. 

Renovation Loans 

• These types of loans are specially designed for fun renovation for various projects like ADU construction. 
• These lower down payments and also make them accessible to homeowners. However, it is a complex process and can often be time-consuming. 
• It is best for people who are looking to purchase a home and renovate ADUs at the same time. 

Construction Loans 

• It is a short-term loan that helps in financing the construction of an ADU or any other property. Once the project is completed, the loan is either laid off or converted into a permanent mortgage. 
• However, it has some strict requirements for details of the entire project plans and may need some rigorous approvals. 

Personal Loans 

• These can be taken and used for a variety of purposes and have fixed interest rates and terms. 
• No collateral is required in personal loans, and these are quickly approved as well. 
• However, because these are unsecured, their interest rates may be higher than other ones. Moreover, personal loans also provide lesser amounts as compared to other loans. 

Government Programs and Grants 

• Some local governments may offer schemes or plans to aid the construction of properties like ADUs. 
• These have lower costs as grants need not be paid. Moreover, there are often provisions of low interest-rate loans offered by the local governments. 
• These programs, however, have some strict requirements and eligibility criteria, which might be a hassle at times. 
• Also, not all areas may benefit from these government plans and schemes, as these have limited availability. 

Cost-Saving Tips for an ADU 

Here are some effective cost-saving tips that will surely be a great help while contributing to or financing your ADUs. 

• Creating a detailed budget is very important, as this helps in avoiding any unplanned or unexpected expenses. You should plan construction, design, size, etc. beforehand. 
• Try and get multiple quotations from different contractors to compare and choose the best deals. It will give a realistic estimate of the entire project. 
• To cut more on costs, you can also opt for prefabricated or modular ADUs, which are built before and assembled to your place. These are less expensive and can be easily tailored to meet your requirements. 
• You can use existing structures like your basement, attic, or garage to create an ADU. This helps in reducing costs as well as effort. The foundation, walls, and roofs are already in place, and one has to give some furnishings to make it appropriate! 
• Try to keep the design simple and minimalist. This also helps in reducing the carbon footprint and is a sustainable option. Moreover, it will require less hassle and will be built quickly. 
• DIY is always helpful. Try to incorporate it wherever possible. Be it décor or some retouches, DIY will surely make your place more elevated and enhanced while effectively cutting on the costs. 
• Try to buy material in bulk and use reclaimed or recycled ones only. Shop around to compare and explore various deals and qualities to choose one that suits your needs. 
• If possible, try to connect the existing utilities with your ADUs, as this can help you cut off lots of costs. You can also invest in energy-efficient and sustainable solar structures for saving energy costs. 
• Be aware and take advantage of the many government plans and schemes that might be helpful in reducing the overall costs of ADU constructions. 

Alternatives for an ADU 

If building an entirely new ADU isn’t what you wish for, then opting for some other feasible alternatives is also the best idea. 

Extended PowerPatio 

Add a sleek and modern extended PowerPatio, which can create a wonderful shaded area. You can create your outdoor office or extended living room beneath. The sleek and impressive structure will be an efficient and sustainable option to add to your property. 

The solar-paneled PowerPatio will give energy to the electric appliances. It will help in reducing costs and give a modern aesthetic to your place. Multipurpose and versatile, these are easy to install and maintain. 

PowerGazebos 

These are sleek and stylish structures that can be attached or standalone. They offer a great space to relax, fine, enjoy, or work in. The solar-paneled gazebo will give energy to the electric appliances and be a sustainable and cost-effective option. 

These will also give a modern touch to your overall architectural aesthetics. Easy to maintain and use, these are very functional and versatile structures. 

Tiny Homes 

These are small standalone structures that can be customized, built, or purchased prefabricated. These are generally used as guest houses and are very cost-effective. Often these can be mobile and have a limited space. 

Home Office 

You can convert an existing space into your home office area. Add furniture and essentials to the place and make it a functional workspace. This will be cost-effective and also an immediately available solution. 

Bottom Line 

ADUs are truly aiding structures that can be used for versatile purposes. Ideal to add to your property and plot, the ADUs offer many benefits to the individuals.

By carefully considering all the factors that determine how much an ADU costs, one can get the best of them constructed quite easily!