As housing prices rise and families look for flexible living options, Accessory Dwelling Units (ADUs) are gaining popularity across the U.S. Whether you're a homeowner seeking extra income or need space for multigenerational living, understanding what an ADU is—and how it can benefit you—is more important than ever.

In this post, we'll break down everything you need to know about Accessory Dwelling Units, including types, benefits, and how to get started.

What Is an Accessory Dwelling Unit (ADU)?

An Accessory Dwelling Unit, or ADU, is a secondary residential unit located on the same lot as a primary home. It’s a self-contained living space with its own kitchen, bathroom, and entrance.

ADUs go by many names:

• Granny flat

• In-law suite

• Backyard cottage

• Garage apartment

• Secondary suite

They can be attached to the main home, converted from a garage or basement, or built as a separate structure entirely.

Types of ADUs

There are several types of ADUs, depending on your property and needs:

Detached ADU

A standalone structure, often built in the backyard. Think tiny home or backyard cottage.

Attached ADU

Built as an addition to your existing home, like over the garage or as a side wing.

Garage Conversion

Transforms an existing garage into a livable apartment.

Interior Conversion

Converts part of your main home, like a basement or attic, into a private suite.

Why Consider Building an ADU?

Adding an ADU to your property offers a range of practical benefits:

1. Rental Income

Generate passive income by renting out the unit long-term or as a short-term rental.

2. Multigenerational Living

Perfect for housing aging parents, adult children, or live-in caregivers—while keeping privacy intact.

3. Increase Property Value

An ADU can raise your home’s resale value and appeal to future buyers looking for extra space or income potential.

4. Guest or Office Space

Use it as a guest house, home office, studio, or even a wellness retreat.

What to Know Before Building an ADU

Every city and town has its own rules for ADUs. Here’s what to check:

• Zoning laws: Not all properties are zoned for ADUs.

• Size limits: Local codes may limit square footage or number of units.

• Permits & inspections: You'll likely need building permits and must meet code requirements.

• Utility connections: Consider sewer, water, and electric hookups.

• Parking regulations: Some areas require off-street parking for ADUs.

Tip: Check with your local planning or building department before you begin any construction.

Financing Your ADU

Wondering how to pay for it? Here are a few options:

• Cash-out refinance

• Home equity loan or HELOC

• Renovation or construction loans

• Grants or local ADU incentive programs (available in some cities)

If you're looking to add value to your property, generate extra income, or create flexible living space, an Accessory Dwelling Unit may be the perfect solution. With the right planning and permits, you can build a smart, functional space that serves your family and financial goals for years to come.

Thinking about building an ADU?
Let’s explore your options, check your property’s potential, and help you navigate local requirements with ease. Reach out today for a personalized consultation!

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