ADU
Accessory Dwelling Unit

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ADU (Accessory Dwelling Unit)

What is an ADU or accessory dwelling unit? An ADU is a second living structure or dwelling on the same property as your primary living structure. Other names for ADUs include granny flats, in-law units, backyard cottages, and carriage houses. Regardless of what you call them, ADUs are some of the best ways property owners can contribute to the much-needed affordable housing causes in San Jose and the state of California.

The cost of living in California is higher than the national average, making accessory dwelling units an essential avenue for many young adults and professionals starting to become independent. Not only do ADUs benefit those who live in them, but also property owners who have them built.

Benefits of Accessory Dwelling Units(ADU)

As a property owner, you can benefit greatly from an ADU being built on your property. One of the biggest advantages of accessory dwelling units is it being an additional source of income. You can easily rent out an affordable secondary living dwelling to a young professional or market it as an Airbnb. In either case, you are adding additional income to your existing.

By renting out your ADU to another individual, you can make your money back in no time because these structures are affordable to construct. Since most of these dwellings are made from cost-effective wood frames, you can expect lower costs than other types of structures.

If renting your ADU is not appealing, consider using it for extended family. As we already mentioned, granny flats and in-law units are other names for accessory dwelling units. As these names suggest, many choose to have ADUs on their property in order to have family members nearby with their own living space and privacy. Those worried about a senior family member may consider housing them in an ADU for safety reasons.

It is important to mention recent legislation passed by the state of California requires cities and counties to promote and incentivize the creation of ADUs. With such a push from the state, you can expect a higher demand for accessory dwelling units moving forward.

A newly-built two-story ADU, or accessory dwelling unit, with stairs leading up to a small porch.

When you think of an accessory dwelling unit, you may think of a guest house or small cottage near the primary living structure. This is a common type of ADU, but it isn’t the only one. There are three types of accessory dwelling units: interior, attached, or detached.

Interior ADUs: This type of ADU is built inside of the primary living structure. The most common spaces converted include basements or attics.

Attached ADUs: Convert an attached garage or a separate living space attached to your home. These ADUs are directly attached to the primary living structure.

Detached ADUs: Like some garages or a shed, detached ADUs are built away from the primary living space. Cottages, converted garages, and tiny homes are common options for a detached ADU.

If you are interested in building an accessory dwelling unit, you have many different directions you can go. DreamHome Remodeling & Builders can assist you in determining which type of ADU is best suited for your property.

Accessory Dwelling Unit FAQs

The city of San Jose has an ADU checklist that may address some of your questions on how to get started. We also understand you may have questions regarding the construction of an accessory dwelling unit on your property. You can find answers to your questions below.

How much does it cost to build an ADU?

The construction cost of your accessory dwelling unit will vary on the type you choose. Converting an attic or basement will have fewer costs because you already have the primary structure built. However, you can drive up costs based on the type of materials and quality of features you use. Most of the time, attached ADUs are less expensive compared to detached versions. Again, the quality of materials and features will have a direct impact on price.

Above all, the cost of your ADU will be determined by several different factors. Contact DreamHome Remodeling & Builders to receive an accurate estimate for your accessory dwelling unit.

How much does an ADU increase property value?

Determining how much an ADU will increase your property value is difficult because of the little research gone into the question. Additionally, accessory dwelling units are a relatively new idea, so people are still pinpointing the value of ADUs.

With that said, a study performed in 2012 found ADUs contributed 25% to 34% of each properties’ value. In addition to this finding, the study concluded accessory dwelling units improved the value of the home by an average of 51%.

Does adding an ADU increase property taxes?

California’s property tax rate is 1% of your entire property’s value. Any time your property is sold or adds new construction, like an accessory dwelling unit, the property is revalued. Since adding an ADU does increase the value of your property, you can expect property taxes to increase. Even so, your property taxes can only be increased by no more than 2% per the Consumer Price Index (CPI).

Free Estimate for Your ADU

Receive a free estimate for your accessory dwelling unit from DreamHome Remodeling & Builders. A project manager with years of experience and industry knowledge will assist you in finding the right ADU type for your property. You can schedule an appointment by calling
(408) 673-0883 or request a free estimate via our contact form.

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