It’s no secret that ADUs are on the rise. There are now 1.4 million properties throughout the country that have ADUs, and that number is growing by an average of 8.6% per year. What is a secret, however, is how you can get the best value on these units. While they can be an affordable solution to rising housing prices, they definitely aren’t cheap! But with the right planning and expertise, you can achieve the best value with your ADU to maximize your investment.
Why Build an ADU in the First Place?
ADUs are becoming more and more popular—but don’t just take our word for it! These units offer residents tons of benefits and may make sense for your family’s situation. Here are some of the reasons why you may want to add an ADU to your property:
- Increase property value: If you’re looking to increase your property value, then adding an ADU is a great way to accomplish this. ADUs offer great returns on investment when it comes to resale value. For instance, in Southern California, you can potentially earn back double your initial ADU investment when you sell your home.
- Source of income: If you’re looking to earn some extra income while essentially doing nothing, then building an ADU and renting it out is the perfect way to do this. You could either rent it out long-term to an actual tenant or do short-term rentals through platforms like AirBnb or VRBO in cities and counties where short-term ADU rentals are permitted.
- Save on housing costs: Housing costs have been skyrocketing lately in almost every category. As a result, it can be difficult for people to afford to buy their own homes. Constructing an ADU on your property is an affordable and beneficial option to house anyone from adult children to aging parents. ADUs provide their occupants with enough privacy and space to feel like they’re independent.
How Much Does Building an ADU Cost?
Unfortunately, there’s no easy way to determine how much building an ADU will cost as it depends on a variety of different factors. For starters, how big will your ADU be? Are you building from scratch or converting an existing structure? What types of materials are you going to be using? These are just a few factors to keep in mind when determining the potential cost of building an ADU.
That being said, there are some basic rules of thumb that you can use to determine the potential cost of an ADU. For starters, some types of ADUs are more expensive than others—with garage conversions being the cheapest and detached new construction being the most expensive.
While the average cost of an ADU, in general, was only $156,000, this number varies depending on the market—especially in the exploding ADU market of California. For instance, the average cost of an ADU in the San Francisco Bay Area was between $350,000 and $390,000. At the end of the day, you will need to determine your ideal price range based on your budget and potential income.
How to Find the Right ADU Builder?
The cost and overall success of your ADU project largely depend on your builder. Instead of choosing a random builder that may not have substantial experience with ADUs, we recommend going with a builder that lives and breathes ADUs. Additionally, if you want your ADU to meet all of your needs, then you should definitely go custom rather than pre-made.
Cottage is a fully custom ADU company that meets all of those qualifications and then some! We are ADU experts that are here to help you through the process from design to construction. We have helped California homeowners make their ADU dreams come true and either provide their properties with extra income potential or provide family members with a place to call their own.
For instance, if you’re looking to maximize earning potential, then you may want to consider something like a two bedroom one bathroom, 750 square feet backyard efficiency unit. This unit comes fully equipped with a full-sized kitchen, a luxurious bathroom, two large closets for storage, a washer-dryer unit, and can even fit a king-sized bed in each bedroom! Yes, all of this is possible within 750 square feet with the right design and expertise from Cottage.
On the other hand, if you’re looking for something a bit smaller to serve as a second home for an aging parent or a post-college child, you may want to consider something like a one bedroom, one bathroom, 340 square feet tiny house. This ADU was specifically designed with the needs of older adults in mind and is totally “ADA aware” with accessible features like grab bars and a roll-in shower. In addition to these practical features, this tiny home is equipped with a custom closet, a small kitchen, a washer-dryer unit, and even a wooden patio! Smartly designed with beautiful features, this ADU is the perfect place for any aging parent to call their own while still staying safe and close to family.
How to Get the Best Value With Your ADU Plans?
While getting the best value with your ADU starts with choosing the right builder, there are other steps that you can take to ensure you get the most bang for your buck throughout the process. Here are some ways that you can get the best value with your ADU plans:
- Build in an area that’s largely ready-to-go and doesn’t require a lot of clearing, demolition, or preparation to begin the building process.
- Choose durable yet affordable and appealing materials that will stand the test of time without eating up a huge chunk of your budget. For example, vinyl plank flooring, base trims, and regular drywall all look nice but won’t add unnecessary costs to your budget.
- Install electric appliances to avoid having to run a new gas line to the ADU (and some cities have gone electric-only for their ADUs already). Stoves, water heaters, dryers, and heating units can all be powered by electricity rather than gas. Plus, this is a no-brainer option if you have solar panels on your existing home that can easily power all of these appliances for a lower cost.
- While it may be tempting to install separate meters for your ADU, especially if you’re going to be renting it out, this may not end up being a cost-effective choice. Instead of spending thousands of dollars to install separate meters, you can install sub-meters instead to track usage or just forgo separate meters entirely and charge for utilities another way.
- Avoiding tile is the last way that you can get the best value with your ADU plan. Yes, it’s tempting to install beautiful tile backsplashes in the kitchen and tile the shower in the bathroom, but this process is very time- and cost-intensive. Instead, consider stonework or fiberglass that looks just as nice as tile but is easier to install.
Final Thoughts on ADU Plans
While getting the best value on your ADU plans is no easy feat, it’s definitely possible with the right builder. So before you go with the cheapest option you find, it may be worthwhile to explore other options that come with better, long-lasting results. Cottage specializes in ADUs of all varieties and is ready to help you design your perfect unit.