Adding an accessory dwelling unit to your home could be a source of income — or a costly mistake. If you’re thinking about an ADU, here’s what to consider before you commit.
Accessory dwelling units are known by many names: in-law suites, guest houses, backyard cottages, or basement or garage conversions, among others. What all ADUs have in common is that they're a separate living space typically added to a single-family residential lot, and they're having a moment.
“It's a housing solution that doesn't solve every problem, but it helps address several problems at one time,” Harrell says. Some California cities are fighting the trend, however, by delaying or denying permits. Most U.S. cities either do not allow ADUs or have strict regulations that inhibit their development, says Kol Peterson, an ADU consultant and the author of “Backdoor Revolution: The Definitive Guide to ADU Development.” Even where ADUs are legal, cities may require zoning exceptions called variances, demand expensive upgrades or impose fees that can add substantially to the cost, Peterson says.
As with any home improvement project, there’s no guarantee you’ll get your money back from an ADU when you’re ready to sell the home, Bishop says.
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