Across the country, people are turning backyard sheds and open spaces into livable second mini homes. They are what’s called ADUs or Accessory Dwelling Units. According to data from the National Association of Realtors, this category of housing rose to 15 percent of total purchases across the country. While they might be used as a home office, home gym, or guest house, an increasing number of these mini-homes are being occupied by homeowners’ parents. According to a recent survey from the real estate experts at HomeLight, 34 percent said that ADUs are on the rise in their markets and 61 percent said that these ADUs are occupied by parents of the owner living there long-term. 

Increasing Number of ADUs Largely Housing Parents of the Owner

No matter who is living in your ADU, agents in the survey are talking about ways to maximize ADUs, to make them not only more comfortable but also to add to your property’s value while you are at it. Considering these appealing ADU features will be a plus when it comes time to sell your home.

Finding space for ADUs

As the demand for ADUs is increasing, people are getting more creative with how they are adding this feature into their properties. While over a third of agents in the HomeLight survey said the most common type of ADU in their markets is a detached structure — like that backyard cottage — even if you don’t have a big yard, there might be a convenient way to add an ADU. Agents shared that an attached structure or interior conversion of an extra room or living area (20%), or garage conversion (16%) were also popular ways to create an ADU. 



Making upgrades that count

To make the most of your ADU, you’ll want to think about its design elements and the qualities of your materials. By paying attention to the details, you could turn an inlaw cottage into a future rental property, either for long- or short-term renters. Agents are talking about the top three design elements an ADU owner can add to increase its resale value: Durable flooring such as waterproof laminate (55 percent), natural light with french doors or a skylight (53 percent), and high-end materials like granite or name brand appliances (47 percent). Even upgrading with one of these design features could increase your home’s value.

Increasing Number of ADUs Largely Housing Parents of the Owner - inside ADU

Will an ADU bring me a return on my investment?

There are a lot of factors that determine how much your ADU will cost to create, and adding upgraded amenities can increase the price of this construction project. Agents in the survey talked about some average costs that you can keep in mind. Nationwide, agents shared that the average cost to build an ADU in their associated markets was $77,239 and the value-added was $65,908. Moreover, they shared that the percent increase in the resale value of ADUs from pre-Covid to current times is 38 percent. If you have the space to build an ADU, or already have one that could get a remodel, now could be the time to get it in shape.