When it comes to one of the most valuable home improvements that can increase the value of your property, find out why an ADU is at the top of the list!

Does an ADU Increase Home Value?

The housing market is red hot right now, and getting a piece of the pie is tough. In fact, it continues to be one of the most competitive sales markets in recent history, with pockets of bidding wars dominating those areas with desirable amenities.

Are you looking to sell your home soon?

If so, you might be considering upgrading your home to maximize your selling power. But how much could adding a second story, an attic, an in-law suite, or other usable space be worth? Would an ADU increase your home value?

Keep reading to find out!

What Is an ADU?

An ADU stands for an Accessory Dwelling Unit. It is an independent, self-contained living space in an existing structure such as a house, garage, or addition. An ADU offers additional living space for a family member, a friend, or even a tenant.

Adding an ADU is not only convenient and cost-effective, but it can also increase a homeowner’s property value. Because of the additional living unit, potential buyers may be willing to pay a higher price for the property.

Additionally, the ADU can be used to offset expenses of ownership, such as home mortgages and taxes, as it generates an additional income stream for the homeowner. Homeowners can also benefit from the added boost to their property’s resale value.

All of these incentives make ADUs an attractive option to homeowners looking to increase the value of their property.

What Are the Different Types of ADU?

Are you looking to earn some extra money with a little investment? Have you considered a Granny or Mother-in-Law Attic addition? As the name says, it’s an expansion of your existing home without adding to the structure of your house. This area can become a separate apartment, or guest house, or give you some extra space.

When searching for the different types of ADU design and style ideas, have no fear. Below is a list of creative ways to earn passive income or a new living space for various situations and budgets:


Detached ADUs are a type of accessory dwelling unit that is separate from the main residence. They are typically situated in a backyard, but can also be built in a side yard or at the front of the home.

They provide a unique housing solution that allows homeowners to supplement their income. They can also provide long-term care to elderly relatives without compromising the existing structures of the neighborhood.

Detached ADUs can be permanent or temporary structures. Typical detached ADU types include:

  • converted garages
  • converted sheds
  • coach homes
  • additional stories,
  • story-above-garage
  • granny flats

Depending on local zoning regulations and homeowner preferences, detached ADUs typically require substantial construction costs. However, the potential rental income when renting the unit out can typically offset these costs.


Attached ADUs, or accessory dwelling units, are secondary units on a property attached to the primary residence.

Attached ADUs can take many forms, such as:

  • adding a second story to the existing home
  • constructing a new wing attached to the side of the home

Other attached ADU forms include room additions, mother-in-law or granny flats, and dormers. Attached ADUs allow homeowners to benefit from:

  • increased living space
  • rental income
  • additional family members on site

This is possible while having the convenience of having the secondary unit attached to the primary residence.

Interior Conversion

Interior conversions are the adaptation of an existing space into an Accessory Dwelling Unit (ADU). Depending on what type of ADU is being created, there are several different types of interior conversions to choose from. Converting the things listed below can help with home improvements that increase value:

  • converting an attic
  • converting a basement
  • converting a garage
  • converting an accessory structure

Each type of conversion is beneficial and can fit different needs, depending on the available space. For example, converting an attic often offers an open, airy, and spacious living environment. The conversion of a basement leads to natural sound buffering.

It also has the ability to use the same main entrance as the primary dwelling. Garage conversions can provide the potential for a large amount of open space and potential storage. Accessory structure conversions can offer convenience, privacy, and flexibility. 

How Much Does ADU Costs?

Depending on the size and costs of the unit, an ADU can increase the value of a home by upwards of 20%. The cost of an ADU will vary depending on the materials used and the contractor you hire.

Generally, a small ADU can cost anywhere from $50,000 to $100,000, while a larger one can cost between $100,000 and $200,000. Depending on what materials you use, you may be able to save money and get a better return on investment.

Additionally, you may be able to utilize grants and other types of financing to help make the costs more flexible and budget-friendly. With an ADU, you can easily double or triple your home’s value while providing a comfortable living space for extra family members or tenants.

Is ADU a Good Investment?

Yes, an ADU (Additional Dwelling Unit) can increase the value of a home and is a great investment for homeowners. ADUs help to increase the value of a home. It does this by allowing owners to generate rental income which helps to pay for mortgage payments and property taxes.

Furthermore, they create opportunities for more people to invest in an area that might not have been previously available. Adding an additional dwelling unit to a home increases the number of people that may be interested in buying that property.

Therefore, ADUs can increase the market value of a home while also providing an attractive opportunity for potential buyers. For homeowners looking to maximize their resale potential for their property, an ADU provides a way to boost value significantly and can prove to be a great investment.

How to Find the Best ADU Interior Builders?

Have you been dreaming of building an ADU but have no idea how to get started? Maybe you have the legal permissions and zoning, and the exterior is complete but you cannot figure out how to complete the interior.

Finding the best ADU interior builders can be tricky but not impossible, here’s how to locate the best interior residential design services for your project:

Research Multiple Companies

When it comes to finding the best ADU interior builders, researching multiple companies is key. Conducting thorough research is a critical part of the process of finding the right company.

Start by getting referrals from friends and family and reading online reviews. Once you’ve gathered a list of potential companies, narrow down your list by researching their portfolios. Evaluate their past works to see if the designs match your vision.

Read Customer Feedback

When seeking out the best ADU interior builders, reading customer feedback is an excellent place to start. Whether using online reviews, testimonials, or word of mouth, it’s important to assess the customer experience to judge a company’s quality of work.

You can see these adu interior builders that can provide quality services for your ADU needs. They have quality reviews that will share both the positive experiences and any drawbacks so you can make informed decisions about their commitment. 

How to Maximise Increase in Home Value with an ADU? 

Many ADUs are built into existing sets of rooms and can reduce the sameness of the overall space. This can help maximize the home’s value by making it stand out among similar homes.

When it comes to maximizing the value of a home, homeowners should strive for a balance between making the space feel new and unique, while not going overboard and adding unnecessary features. Homeowners should also think carefully about their intended market, and tailor the ADU to fit the area and maximize home value.

Understanding the Impact of an ADU on Appraisals and Assessments

Knowing how an Accessory Dwelling Unit impacts the home’s value is important to understand before embarking on this undertaking. In most cases, an ADU does increase the home’s value, but it is not a one-size-fits-all situation.

An appraiser or assessor may take into consideration several factors such as:

  • the quality of materials used
  • local market conditions
  • your home’s zoning laws

This is crucial when determining the impact of an ADU on your home’s value. Ultimately, a reputable real estate appraiser or assessor will be able to determine just how much of an impact an ADU will have on your home’s value.

Best Ways to Increase Home Value With ADU

Overall, ADUs can have a large impact on a home’s value. While the exact increase in value depends on a variety of variables, such as location and quality of the unit, there is no denying the potential profits and other benefits an ADU can bring.

For anyone considering building an ADU, consider all factors and research the local regulations beforehand.

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