Many prudent homeowners are looking at new ways to make the most of the investment in their homes. One way that’s creating quite a buzz is to build an ADU or Accessory Dwelling Unit. 

Also referred to as an attic apartment, garage conversion, granny flat, or in-law cottage, this secondary housing unit or ADU is typically built on a single-family residential lot, although ADUs can also be built in a multi-family residence, such as a duplex, triplex, or fourplex. 

If you’re searching for ways to accommodate aging family members, adult children, or hoping to generate some passive income, then an ADU may be the right solution for you.

To aid you in understanding the value of an ADU, here are 3 great reasons to build one:

Reason #1: An ADU Increases Property/Potential Resale Value

The number one reason to consider an ADU is increased home value and resale potential. How much an ADU increases the value of your property can vary. It depends upon the location, quality, type, and size of the ADU you choose to build given all ADUs are not considered equal. Typically, a detached (permitted, traditional construction) ADU will be the most valuable. However, homes on the market with a detached, attached, or conversion ADU each tend to attract more buyers and higher offers because of the added living space and rental income possibilities.

Reason #2: An ADU Can Provide Passive Income

An ADU is potentially one of the wisest investments a homeowner can make given it can be rented to drive passive income. If a detached ADU isn’t practical because your lot size can’t accommodate it, then consider converting your attic, rarely-used family room, spare room, or your garage into an ADU. There is significant value in this type of attached or conversion ADU because of the rental income it can command. In certain parts of California, that rental income can be considerable. This is especially true in areas where housing costs are high (or on the rise), as limited rental space is then priced at a premium.

Reason #3: An ADU Provides A Safe and Affordable Housing Solution

A 2024 California Department of Finance study revealed that ADUs accounted for 20% of new home construction. This amounts to 1 ADU out of every 5 homes built, versus only 1 ADU out of every 10 new homes in 2020.

So, what accounts for the considerable jump in ADU construction in just 4 short years? More and more, residential property owners are looking for safe and affordable housing solutions for their aging parents and/or adult children. An ADU can serve as a great solution for many of today’s multi-generational households. Aging parents can live in an ADU on the property of their grown children, affording them independent living with greater safety due to close proximity. And while adult children may not yet be ready to buy their own home, an ADU can serve as an ideal housing solution for a single adult or married couple with their first child.

In summary, there are 3 great reasons to build an ADU: increased property value, passive income generation, and affordable housing for loved ones.

If you’d like to build an ADU, then call Ed Neir Construction at 707-999-5878 for a free consultation and estimate. Or, text Ed at 408-368-7162 with your email address to receive a free ADU information guide providing further helpful details. To quickly scan our various service offerings check out our landing page, or spend time on our main website for complete details.

Ed Neir, General Contractor, License #: 928715