Wondering how much it costs to build an ADU? On average, building an Accessory Dwelling Unit (ADU) can range from $30,000 to $300,000, depending on the type and design. The final cost depends on factors like whether it’s detached or attached, the materials used, and if you’re repurposing existing spaces.
Here, you will learn what impacts ADU costs and also practical tips for saving money while maximizing your investment. Whether you’re planning to create extra living space or generate rental income, knowing these things will help you make informed decisions and stay within budget.
What is an Accessory Dwelling Unit?
An ADU is a self-contained residential unit built on the same lot as a primary home. Commonly known as granny flats or in-law units, they can be detached, attached, or conversions of existing spaces like garages or basements​. They offer complete living spaces with a kitchen, bathroom, and bedroom, providing independent living quarters.
ADUs have surged in popularity, particularly in cities facing housing shortages and rising property prices. Homeowners use them to add functional space without purchasing additional land​.
Factors Impacting the Cost of Building an ADU
Type of ADU (Detached, Attached, Garage Conversion)
The type of ADU you choose significantly impacts the overall cost. A detached ADU, costing between $150,000 and $285,000, is the most expensive because it requires a separate foundation, walls, and utilities. A garage conversion is more affordable, ranging from $20,000 to $140,000, as it repurposes an existing structure​. An attached ADU, which shares walls with the main house, typically costs around $154,400, offering a middle-ground option.
Each option has trade-offs: detached ADUs offer more privacy, while garage conversions and attached ADUs are more cost-effective but may limit design flexibility.
Construction Method (Prefab vs. Custom)
Prefabricated ADUs, built in factories and assembled on-site, cost between $80 and $160 per square foot. They are faster and more budget-friendly, ideal for homeowners seeking quicker construction.
In contrast, stick-built ADUs, constructed entirely on-site, offer more design flexibility but are more expensive, typically costing $150 to $250 per square foot.
While prefab ADUs save time and money, customization is limited. Stick-built ADUs allow for personalized designs but come with higher costs.
Labor and Material Costs
Labor and materials account for the majority of ADU construction costs, with labor typically making up 40-60% of the total. Skilled workers like electricians, plumbers, and carpenters can significantly raise costs, especially for complex designs or utility upgrades.
Material costs vary based on your choices. High-end materials such as granite countertops or hardwood floors will increase expenses, while budget-friendly options like laminate flooring and vinyl siding help keep costs lower​. Choices for roofing, windows, and insulation also affect both upfront costs and long-term savings, especially if energy efficiency is a priority.
Site Preparation and Zoning Regulations
Site preparation adds to ADU costs, primarily if the land requires work like excavation or grading, which can range from $1,500 to $10,500​.
Zoning regulations can also influence costs, as permits and other legal requirements vary by location. Cities often have restrictions on ADU size, placement, and utility connections, potentially increasing project costs and timelines​.
Checking local zoning laws and budgeting for permits, typically $500 to $2,000, guarantees smooth construction without unexpected delays.
Average Cost Breakdown for Different ADU Types
When building an Accessory Dwelling Unit (ADU), the cost varies depending on the type of ADU you choose.
A detached new construction ADU is one of the most expensive options. It can cost anywhere from $150,000 to $285,000​. This is because a detached ADU functions as a completely separate structure, requiring its foundation, utilities, and infrastructure. Essentially, it’s like building a small house, which makes it pricier than other ADU types.
An attached ADU, which shares at least one wall with the main house, is generally more affordable. It typically costs between $154,000 and $216,000​. Since it utilizes part of the existing home’s structure, such as walls and utilities, the cost is lower compared to a detached ADU.
A garage conversion is one of the most budget-friendly ADU options, ranging from $20,000 to $140,000. Converting an existing garage into a living space cuts down on construction costs since you don’t need to build new walls or a foundation. However, costs can increase if extensive plumbing or electrical upgrades are needed.
For a lower-cost option, prefabricated ADUs offer a good solution. These ADUs are built in factories and assembled on-site, costing about $80 to $160 per square foot. Prefab ADUs tend to be cheaper and faster to build, although they offer less design flexibility compared to custom-built options.
Cost Considerations to Build Accessory Dwelling Unit
Planning and Design Fees
Before you can start building an ADU, you’ll need to invest in planning and design. Hiring an architect or designer typically costs between $1,200 and $5,000. This covers drafting blueprints, getting the necessary approvals, and ensuring the design meets local building codes.
Additionally, you’ll require permits to legally begin construction, which can range from $500 to $2,000, depending on your location and the size of the ADU.
Interior and Exterior Finishes
High-end finishes like granite countertops, hardwood floors, or custom cabinetry will drive up expenses. For instance, adding these luxury materials can easily push your project into a higher budget bracket.
On the other hand, cost-effective options like vinyl flooring, laminate countertops, or basic tile can help reduce costs without sacrificing functionality. The choice between these two will depend on your overall budget and the look you want for your ADU.
Labor and Management
Labor costs make up a large portion of the overall ADU expense, and how you manage the project can affect these costs. Hiring a general contractor to oversee the construction can make the process smoother but adds to the budget​.
Contractors coordinate all the work—hiring electricians, plumbers, and carpenters—which saves time and confirms quality. However, managing the project yourself (DIY) might save some money upfront but comes with the challenge of overseeing different workers and making sure the project stays on track.
Utility and Infrastructure Upgrades
Upgrading utilities for your ADU can also add to the total cost. Adding plumbing, electrical, and HVAC systems often requires connecting to the existing home’s utilities, which can be complex. If your ADU is located far from these systems, costs will rise.
Installing plumbing and electrical systems may cost several thousand dollars if you want to upgrade existing lines or install new ones​. Similarly, adding a heating and cooling system, like an HVAC, further increases the total budget but is essential for year-round comfort.
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Ways to Save on ADU Construction Costs
Opt for a Prefabricated Unit
Selecting a prefabricated unit is one of the most cost-effective ways to construct an ADU. Prefab ADUs are built in factories and assembled on-site, making them faster and cheaper. Though customization possibilities are limited, their affordability makes them a solid choice for budget-conscious homeowners.
Reusing Existing Spaces
Converting existing spaces like a garage or basement is another way to lower costs. Since you’re working with an existing structure, expenditures are reduced as you don’t need to establish new walls or foundations. Garage conversions are a cheaper alternative to detached units.
Simplifying Design
Sharing plumbing walls between the kitchen and bathroom cuts down on labor and materials. Additionally, preferring budget-friendly finishes like vinyl flooring or laminate countertops keeps costs low while maintaining functionality​.
The ROI of Building an ADU
Rental Income
Establishing an ADU can generate significant rental income. The amount you can earn depends on your location and the size of the unit.
In high-demand cities, like Los Angeles or Portland, homeowners can charge anywhere from $1,200 to $3,000 per month for renting out their ADU. This extra income can quickly cover the construction costs and provide a steady revenue stream, and a great investment for homeowners. If you rent long-term, an ADU can help pay off your mortgage or fund other expenses.
Increased Property Value
An ADU can also boost your home’s property value. Adding a fully functional living space, mainly in areas with tight housing markets, can grow your home’s overall value by 10% to 30%. This increase depends on the quality of the ADU and the local real estate market.
Even if you don’t plan to rent the unit, having an ADU adds flexibility to your property, which makes it more attractive to potential buyers, giving you a solid return on investment when you decide to sell.
FAQs
What is the cheapest way to build an ADU?
The most affordable way to create an ADU is by reusing existing spaces, like a garage or basement conversion. These options are inexpensive because you don’t have to produce from the ground up. Converting a garage can cost between $20,000 and $140,000, which is significantly lower than constructing a new detached ADU.
Choosing prefabricated ADUs is another cost-effective route, with costs ranging from $80 to $160 per square foot, offering a faster and less expensive alternative​. Keeping the design simple and using budget-friendly materials, like vinyl flooring or laminate countertops, can also help reduce costs.
Can building an ADU expand my property taxes?
Yes, constructing an ADU can increase your property taxes. When you add an ADU, your home’s assessed value typically goes up, which leads to higher property taxes. The exact amount relies on your location and the size and value of the ADU.
In some areas, local laws may offer tax exemptions or reductions for ADUs, so it’s a good idea to check your local regulations before building​.
