5 Benefits of Building a Guest House on Your Property

Published On: May 10, 20220 Comments on 5 Benefits of Building a Guest House on Your PropertyLast Updated: January 31, 20245.1 min read

During the height of the pandemic multi-generational housing rose to a high of 15% of total home purchases.  Since 2020 more and more homebuyers are aware of the need to one day take care of their loved ones and they are searching for ways to fill that need.  One method that has become popular is the construction of a guest home or accessory dwelling unit.  These additional structures can take on many forms such as a detached unit, an attached unit, or an attic/basement renovation.

5 Benefits of Building a Guest House on Your Property

The national average to build a guest home is $100 to $200 per square foot.  To get the most bang for your buck you’ll want to build a guest house that is at least 500-square-feet which will allow enough room to make your guest house an accessory dwelling unit.  If you include a full kitchen and bathroom in your guest home you can rent for additional income and utilize it as a completely separate living area.  There are many ways to use a guest house that will benefit you and your family personally and even financially.

Space for Family

Over 90% of seniors want to live in their own home as they age, however only 40% of people over the age of 70 find it easy to live independently.  The contrast between seniors striving for independence and the decline in their ability to do so can create quite a bit of stress on families.  But having a guest home where aging parents can reside independently could lessen stress.  The number one reason that homeowners build an accessory dwelling unit is to house their aging parents, according to 61% of top real estate agents.  With so many homeowners using their guest house as a permanent or semi-permanent home for their aging family members, it is important to consider accessibility and safety if you decide to construct a guest home on your property.  Consider choosing non-slip surfaces for kitchen and bathroom flooring.  Keep the shower easy to access and consider a raised or high-profile toilet.  You should also use lever handles for doors instead of standard door knobs and make sure the entryway is wheelchair accessible.  Small changes such as these will ensure that your guest home is safe and fully accessible for aging parents.


Over a third of real estate agents nationwide have seen an increase in ADUs.  The trend is more prominent in the Pacific in Mountain regions but has grown nationwide.  If you are adding a guest house and also considering the possibility of selling your home in the next few years, consider building a detached structure rather than an attached unit as they are more popular. There has also been an increase in the value of ADUs from $47,597 to $65,908. The increase in value will give you a slightly higher return on investment for a guest house when you go to sell your home in either increased appraisal value or in marketability.  An attached guest house will add value to your home by contributing to the square footage of the main house.  A detached guest house will add value as a line item adjustment in the range of $15,000 to $30,000.  The overall value of an ADU may not cover the cost of building the structure, however a guest house will give your home a boost in marketability since it is a sought after housing trend.

5 Benefits of Building a Guest House on Your Property - guest house

Rental Income

While some homeowners are opening up their guest home to their aging parents or adult children, others are using theirs as a rental unit.  The third most common use of a guest house according to real estate agents is a short-term rental.  It’s no surprise that homeowners are using a guest house as a way to earn a side hustle.  Nearly half of all Airbnb hosts earn an average of $924 a month.  The amount that you charge for rent varies largely based upon tourist attractions in your area, how often you rent out your unit, and of course the cleanliness, accessibility, and overall aesthetic. Using your guest house as a short term rental is not legal in every area of the country.  For example 90% of real estate agents in the Pacific region said it was legal to rent out an ADU, however in the Northeast only 42% believed it to be legal.  Check with your local government prior to building a guest house that you hope to use as a rental.  If it is legal to rent an ADU in your area, consider using sought after materials such as durable flooring, grant countertops and name-brand appliances.

Private Getaway

Your home is cluttered and your children have taken over almost every inch of space with their toys.  So where can you go to find some peace and quiet?  If you have a guest house you can use it as a private getaway.  A space where you can indulge in your favorite hobbies or just kick back, relax and watch something other than cartoons.  Homeowners with a guest house on their property can use their additional space as a fitness area, art studio, or other area for their personal hobbies.

Long-term Guests

Over 30% of real estate agents say homeowners intend to use their guest house as a space for visiting friends and family.  With extra space for family and friends to sleep, long family visits can be much more enjoyable.  The additional space will allow for family and friends to spread out and relax while you can continue about your daily life without too much interruption. Adding a guest home to your property can benefit you and your family in many ways.  Most importantly, it can add to the enjoyment of your home by providing additional square footage.  It can also provide a more relaxing space for visiting friends and  family as well as aging parents.  While a guest home won’t give you a full return on investment it will add to the marketability of your home since it is a trend that is increasing in popularity.

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