Are ADUs Worth It?

ADUs are gaining popularity, but are ADUs worth it? This article aims to answer that question comprehensively. We’ll explore key aspects like return on investment, additional living space, property value, zoning laws, and costs. By the end, you’ll have the insights needed to make an informed decision about building an ADU, whether for financial gains or lifestyle improvements.

ADUs offer multiple benefits. They range from financial and lifestyle, though you also need to consider several factors.

Return on Investment

  • Financial Gains: One of the most compelling reasons to consider building an ADU is the potential for financial gains. Renting out an ADU can provide a steady income stream, helping to offset mortgage payments or other expenses.
  • Long-term Value: An ADU can also add long-term value to your property. As housing shortages continue to be an issue in many areas, properties with ADUs are likely to be in high demand.
  • Tax Benefits: Depending on your jurisdiction, there may be tax benefits associated with building an ADU, such as deductions for property improvements. According to National Multifamily Housing Council (NMHC):

Recent data from the National Multifamily Housing Council (NMHC) highlights the effectiveness of these deductions. The NMHC reports that over 20 million Americans live in rental properties, with a substantial portion of these being ADUs. As these property owners leverage deductions, they collectively save billions of dollars in taxes each year, demonstrating the tangible financial impact of ADU-related deductions.

Additional Living Space

  • Family Use: An ADU can serve as additional living space for family members, such as aging parents or adult children. This can be a cost-effective alternative to senior living facilities or renting another property.
  • Guest Accommodations: Having an ADU can also provide a private space for guests, reducing the need for a hotel.
  • Personal Use: Whether it’s a home office, gym, or hobby room, an ADU can serve various personal uses that can enhance your lifestyle. Per HUD:

ADUs can provide as much living space as many newly-built apartments and condominiums, and they’re suited well for couples, small families, friends, young people, and seniors.

Property Value

  • Increased Resale Value: ADUs can significantly increase the resale value of your property.
  • Market Demand: As mentioned earlier, properties with ADUs are becoming increasingly popular, especially in areas with housing shortages.
  • Curb Appeal: A well-designed ADU can also enhance the overall aesthetic of your property. Per Realtor Magazine:

Properties that have one are sought after. In the largest cities, a home with an ADU is priced 35% higher, on average, than a home without one…

Zoning Laws

  • Local Regulations: Before building an ADU, it’s crucial to understand the zoning laws in your area.
  • Permitting: The permitting process can be complex and time-consuming, so it’s essential to factor this into your plans.
  • Restrictions: Some areas may have restrictions on ADUs, such as size limitations or parking requirements.


  • Construction Costs: The cost of building an ADU can vary widely depending on size, materials, and labor costs.
  • Ongoing Expenses: Consider the ongoing expenses such as utilities, maintenance, and potential property tax increases.
  • Financing: Look into loans, grants, or other financing options to help cover the costs. Per Angi:

An ADU costs approximately $150 to $300 per square foot on average, but some ADUs cost over $600 per square foot.

ADUs can offer a variety of benefits, including financial gains, additional living space, and increased property value. However, it’s essential to consider the zoning laws and costs involved. For those who do their due diligence, the answer to “are adus worth it” is generally a resounding yes. For more insights, consider consulting with a real estate expert.