Are you in need of extra space in your home? Or looking for a way to supplement your income? Look no further than accessory dwelling units (ADUs). These versatile living spaces have become the perfect solution for homeowners seeking additional square footage and a new stream of revenue. ADUs, also known as granny flats, backyard cottages, or mother-in-law suites, are compact dwellings built on the same property as an existing home. They can be attached or detached from the main house and come in various sizes and styles to suit different needs and preferences. Unlocking the potential of ADUs not only allows homeowners to create much-needed space for aging parents, grown-up children, or visiting guests, but it also presents a fantastic income opportunity. By renting out the ADU, homeowners can generate a steady cash flow or even pay off their mortgage quicker. In this article, we will delve into the benefits and considerations of ADUs, explore their legal and financial aspects, and provide practical tips for designing and utilizing these backyard gems to their fullest potential. So get ready to unlock the doors to extra space and income with ADUs!
If there’s one thing that last couple of years has shown us, it’s that families aren’t willing to dump their elderly loved ones in retirement facilities anymore. In HomeLight’s End of the Year Report for last year, real estate agents reported that 47% of homebuyers in Roswell, New Mexico and other cities in the Mountain region are looking for houses with an accessory dwelling unit – or an ADU. If you’re looking for ways to keep loved ones close or adding more living space to your property, we’ve got the details about ADUs, their use, and whether they’re worth investing in.
What can an Accessory Dwelling Units be used for?
There’s a lot that you can do with an accessory dwelling unit. It’s true that most homeowners (61%) will use these dwellings so their elderly loved ones can live with them. However, these units can serve a number of uses. 35% of real estate agents say that their clients are going to use these spaces for adult children who need to stay home so they can save money or they’re on break from college. Homeowners aren’t just using ADUs for their family members. 32% of surveyed real estate agents say their clients are going to turn an ADU into a vacation rental and post it on AirBnB or something similar to generate passive income. 41% of agents say their clients are going to turn the space into a home office and 16% say it will be turned into a home gym. Needless to say, there’s a lot you can do with an ADU!
What kind of a structure is an ADU?
Almost 1/3rd of the real estate agents that took part in the survey said that they have clients who have (or want) an ADU that is completely detached from the main residence. But you don’t have to have a standalone structure to be considered an ADU. There are 24% of realtors that have come across properties where the ADU shares at least one wall with the main residence. But it’s not too uncommon to find properties that have converted an attic, basement or garage into an apartment or suite to meet their needs.
Do ADUs add to your property?
As ADUs gain popularity, you may be wondering if they’re worth the investment because they can get pretty pricey depending on what you do. On average, real estate agents say homes with some kind of an ADU can expect to see a 38% increase on their home’s value. That means it can add anywhere from $47,597 to $65,908! If you live along the west coast, you can see a six figure return on that investment! Wow!! Before you start searching on building a brand new ADU on your property, you might not want to do that. On average, a newly constructed ADU can cost $77,239, but depending on your location, you could actually lose 15%! Needless to say, we recommend that you consult a real estate agent for advice.
ADUs add plenty of value both financially and in the heart
In a time where it can feel like it’s you against the world, the familial bonds we have with loved ones has never been so important. The public health crisis that the world has been experiencing for the past two years has shone a light on the inadequacy of retirement homes and the lack of compassion and care our loved ones get there… Well, of course people are going to explore various avenues when it comes to our loved ones.
An ADU isn’t just useful for families though. These additional spaces can be turned into anything you want really. If you’re able to work from home full time, an ADU may be exactly what you need so you can work distraction free. If you had to cancel your gym membership, you can turn it into a home gym or meditation haven. All in all, an accessory dwelling unit can be turned into anything you want!
