Over the past few years there has been an explosion of ADUs across the country. This is because ADUs are a simple and cheap solution to solve many of the diverse housing needs of individuals in this country.
ADUs can have major upside both for homeowners and for those looking to rent out a small space for themselves or their families.
What is an ADU?
ADU stands for Accessory Dwelling Unit and is a secondary housing unit on a single-family residential lot. ADUs are also commonly referred to as granny-flats, in-law apartments, mother-law apartments, laneway houses (the more popular term from ADUs in Canada) and backyard cottages.
ADUs are often built in the backyards of the residential homes that occupy the lot; however, this may not always be the case.
In fact ADUs can be attached or detached from the house, ADUs can be portable, they can be in your basement and ADUs can even be built in or above your garage. I have even seen AUDs built out of storage containers or storage pods.
Again what ADU stands for is accessory dwelling unit, but what this actually looks like can vary from state to state and person to person. There are several different types of ADUs to help meet each individual need.
What is an ADU: Types of ADUs
Through the years people have become more creative in constructing ADUs to help meet their various needs. Below is a list of some of the most common types of ADUs.
Detached New Construction ADU
This type of ADU is detached from the house and is built from the ground up. For this reason, this type of ADU tends to be one of the more expensive options, but also one of the best options if you can afford it.
The reason I say this is one of the best options is that since it is a unit entirely separate from the main house you will not have to worry about people being in your personal space.
If you build separate, detached ADU then the person who occupies that space will have their own kitchen, their own bathroom and their own entrance and so you would never have to be bothered by that individual or family.
That means you wouldn’t have to bug them to clean up the mess in the kitchen or to put the seat down in the bathroom. You have your own space and they have theirs.
You could even take it a step further and give the ADU a separate address and its own separate power supply as well if you really wanted some separation between your primary residence and your ADU.
But most of the time the separate space alone is enough.
These ADUs are also useful if you have aging parents or grandparents that you would like to be close to. These detached ADUs allow for close enough proximity that you could be there in case of an emergency while still allowing each of you to live your individual lives.
Another great option for these types of ADUs is using them as an AirBnB rental. Just place a keypad on there and people can come and go as they please while you make a little extra money on the side.
Again, there are a myriad of options for detached ADUs and although they may be costly up front, they give you and your occupants the greatest amount of privacy.
Garage Conversion ADU
If you would like to save money, and don’t want to hassle with building a new unit in your backyard, then converting your garage into an ADU may be the best option for you. This option is common for those who may not have a ton of yard space, and have run out of rooms in their home but still like to build an ADU.
In order to convert your garage into an ADU you will first need to check with your city to see what the laws are regarding converting your garage into an ADU. You will then need to make sure that your garage is large enough for the conversion.
I typically recommend that the garage be at least 350 sq ft if you want to convert it to an ADU. It will be a tight fit, and you will have to make the most of your space, but it is doable.
However, one downside to converting your garage into an ADU is that you lose parking space. If you live on a street where parking is scarce then this will be something that you should consider before deciding to convert your garage into an ADU.
If you are trying to save some money, and it is permitted in your city, then converting your garage into an ADU may be the best option for you.
ADU Above the Garage
Building an ADU above your garage is an option, but not a very common option. The reason being is that most garages are not structurally sound enough to support a second story being built on top of them.
By the time you reinforce your old garage and make it sturdy enough to support a second floor, you might as well just tear down your existing garage and build a new garage entirely.
As you could imagine tearing down your old garage, building a new reinforced garage and then constructing an ADU on top of all of that will not only be time consuming, but very costly as well.
So for this reason (time, cost, etc.) this is not a very common route that people take to constructing their own ADU. But if you are set on having an ADU above your garage then it is possible, just not very practical for most people.
However, if you have the money and are set on having an ADU above the garage then it could be a great option for older children who want more independence, while remaining close to their families, especially their families refrigerator.
Addition ADUs or “bump-out ADUs”
An attached ADU is an additional living unit added to the main residence. These types of ADUs are typically located to the side or rear of the primary residential structure.
Similar to converting your garage to an ADU, this is also a common and affordable option for those wanting to construct an ADU.
These addition or “bump-out” ADUs are basically a tiny home attached to your main home. If you don’t mind a person living so close to your primary dwelling space then this could be an easy option for you and a way that you could save a ton of money on building costs
But as always, check your cities laws and regulations as this will dictate the size and requirements for your ADU addition.
Basement Conversion ADU
These types of ADUs are also known as basement apartments, secondary suites, or English basements. Basement to ADU conversions are allowed in many cities and, if the conditions are right, they can be the easiest and most cost-effective way to create an additional dwelling unit on your property.
A few reasons why this option is so cost effective and easy is because for one the shell of your ADU (windows, walls, roof and foundation) already exists. Also, if your basement does not already have utilities attached to it, you can easily connect utilities from the primary dwelling space to the ADU down below.
Last of all you do not not need to sacrifice yard space in order to have an ADU if you build one in your basement and you more than likely will not miss the space underneath your house either.
I lived in a basement apartment for close to a year and it was really nice! I had my own entrance, kitchen and bathroom. It was just me living in that space and so it was more than enough and it was much cheaper than having my own apartment.
The only downside was that my landlord controlled the AC and it felt like the Ice Age 2.0 down in the basement at times and so be warned that the temperature in your basement apartment will be much lower than in the main living area.
If you have an empty basement, consider converting it to an ADU and renting it out to make some extra money each month.
And if you are looking to rent your own space, but don’t have enough money for your own apartment, consider renting a basement apartment. They are a great way to save money while still feeling like you have your own space.
Internal ADU
An internal ADU is when part of the primary dwelling space, besides the basement, is converted into an ADU. Like the basement, this can be one of the easiest and most cost-effective ways to create an ADU.
Similar to building an ADU in your basement, the structure and foundation of the ADU is already in place and all you are doing is adding things such as a kitchen and bathroom.
Your utilities should already be connected, or easy to connect to the space and it is already built out and it does not require you to add onto your house. However, one obvious setback is that you will be sacrificing part of your living space in order to build this type of ADU.
This ADU option would be ideal for smaller families or individuals who do not need all the extra space and would like to live with someone who could help with housing costs.
Prefabricated ADU
Prefabricated ADUs, or prefab ADUS, are becoming more and more common. Prefabricated ADUs are pre-made ADUs that can be delivered to your home and easily installed.
They are the quickest and easiest way to ADU ownership. In fact, certain prefab ADU companies are able to obtain permits for you within hours and have your ADU delivered to you within two weeks!
Of course this will depend on your city and location, but several prefab ADU companies are working with cities to expedite the ADU permit process allowing you to have an ADU on your property as soon as possible.
The prefab ADUs are often really nice too! Just because it is prefabricated in no way means that quality has been sacrificed.
The only drawback to prefab ADUs is that the price typically starts at $100k once you account for permits, fees, and delivery and only increases for ADUs that are larger and of better quality. However, many companies offer financing options and will work with you to get loans to help construct your ADU.
Prefabricated ADUs are the simplest way to ADU ownership, but be warned, they may come at a price!
As you can see from the list above, there are several types of ADUs and each one has its own unique benefits and drawbacks. So why might a person consider building an ADU?
What is an ADU: Uses of an ADU
As you can imagine there are many reasons why people decide to build ADUs. I will provide some of the top reasons that I have seen as to how people use their ADUs:
Rent Out the ADU
ADUs have become so popular because they are a great solution to rising housing costs across the nation. For this reason it makes sense why ADUs are great to rent out and why so many people these days want to rent an ADU.
As has been mentioned, ADUs are like “mini apartments” and so you can charge your tenants a little extra for the extra amenities. This extra income can help you to pay your own bills.
Not only are these extra amenities such as a kitchen and bathroom great for your tenants, but they allow you and your tenant to live separately without interfering in each others personal space.
Using an ADU as a rental can be a great way to supplement your income.
Live in the ADU Yourself and Rent Out the Primary Residence
Another way that people have been able to greatly reduce their monthly expenses is by living in their own ADU and renting the primary residence out.
By staying in the ADU and renting out the main house you are able to charge more for the primary residence to be rented out than you would be able to charge someone who wants to rent your ADU.
This is a great option for a single person who bought or inherited a large house and does not need all the extra living space. Why not rent it out to someone who could use the space and make a little extra money?
I have also seen parents who are empty nesters let their children and grandchildren live in the main house while they live in the ADU. They no longer have kids to take care of and so some parents are nice enough to let their children raise their families in the main house.
An ADU has all your basics (kitchen, bathroom, etc.) and so if you don’t mind the smaller space then living inside your ADU and allowing others to occupy your primary residence is a viable option.
Be Closer to Family
Another reason to build an ADU is to be closer to family.
You may have aging parents or grandparents that you would like to take care of and so having an ADU allows you to be close to them while still having your own personal living space.
I have met several people who have built ADUs solely for their parents to live in; not only for health concerns but also just to have their mom and dad close by to be with or take care of their children.
Another person that might like having an ADU is your young adult child. With housing costs on the rise it can be difficult for young adults to find adequate housing at a decent price.
So how can your young adult child balance independence with financial stability? The answer could be an ADU. They would have their own private area and so they could come and go as they please all the while they are gaining that indepence that many young adults yearn for.
An ADU can be a great option to keep families closer together.
Use as an AirBnB
AirBnBs have boomed over the past several years. They are a cheap alternative for when you are traveling and are easy to check in and out of.
For this reason, why not use your ADU as an AirBnB? If you would like to make some extra income, but don’t want a long term tenant staying in your ADU, using your ADU as an AirBnb may be the perfect middle ground.
I have stayed at a few AirBnBs that were actually ADUs and they have all been fantastic! They have their own stove, bathroom and entrance so it feels just like a tiny home. The landlord just messages me the code to enter and any other details I should be aware of and then I am good to go.
Using your ADU out as an AirBnB is simple and it allows you to decide when you want and don’t want to have any guests in your ADU. No long term contracts, just extra money on your terms.
Final Thoughts
ADUs come in all shapes and sizes and have several different uses. As housing prices continue to rise across the United States, ADUs are a great solution both for those looking to rent as well as for those looking to supplement their current income.
ADUs will only continue to rise in popularity!