The top 5 reasons people build ADUs
Accessory dwelling units (ADUs) are a wise investment for many reasons. They’re good for communities, and they’re a huge benefit to their owners. At New Avenue, we love to hear our clients’ stories and reasons for building ADUs. Usually, a client has more than one use in mind. Here are some of the top reasons our clients decide to invest in an accessory dwelling unit.
1. More space for work or family
Often, our clients find that they love their homes but need more space. Maybe the family wants a rec room (table tennis, anyone?). Or maybe the homeowner needs a dedicated home office or art studio. (After all, working at the kitchen table is hardly ideal.) An attached or detached ADU can provide additional space for anything you want to do.
2. Additional monthly income and a profitable investment
When you rent out your accessory dwelling, it pays for itself very quickly. Even as you’re paying it off, you still come out ahead every month. Here’s a real-life example based on a a one-bedroom, one-bathroom ADU we designed and build in Berkeley, CA:
The total cost to design and build this project was $271,455.55.
A $271,000 mortgage at 3.2% interest requires a monthly payment of $1,172.
When you add the monthly property taxes, you get a total payment of $1,304.67.
Comparable rents in the area are around $1800 or more per month. Even before the ADU loan is paid off, there’s a clear profit for the homeowner in renting this ADU out - in this case they are taking home about $500/month.
Even if you don’t rent your ADU out as a long-term rental, you may be able to make it a short-term rental when it’s not in use. Many of our clients utilize Airbnb, VRBO, or other vacation rental services to rent out their ADUs on weekends, holidays, or when they aren’t being used by the owners. (Check your local regulations to determine whether short-term rentals are allowed in your community.)
Regardless of whether you rent out your ADU or not, you can always count on increased property values and appreciation, especially in high-demand areas like Portland, OR and the San Francisco Bay Area. That makes an ADU a solid investment, even if you plan on selling your home in the future.
3. Guest suite
Many of our clients have always dreamed of owning a guest suite or guest house. If you have frequent visitors, a dedicated space can give everyone the best possible combination of closeness and privacy. ADUs are perfect for this as they allow guests to come and go as needed, and provide a separate kitchen and bathroom for those who have an extended stay. This makes hosting guests more enjoyable and stress free.
4. Aging in place and multigenerational living
For seniors who need a little extra help but want to stay at home instead of moving into an assisted living facility, an ADU is an outstanding solution. Some homeowners build ADUs for themselves and move their adult children into the main house. Some remain in their homes and build ADUs for their younger family members to live in. The right solution varies according to each family’s needs.
Multigenerational living allows aging family members to maintain their independence longer. This kind of setting has been shown to keep people more active, and therefore happier and healthier, as they age. But the benefits aren’t just one-way. Active grandparents and great-grandparents are a blessing to their families as they share their skills and life experience. And, families save money when they combine resources and share homes.
5. Downsizing
Many of our clients decide to build an ADU and move into it themselves. They then rent out the main home or move loved ones into it. For those who want to downsize and streamline their lives, an ADU is a great option. If you rent out your main home, you can easily pay for your ADU, stay in the neighborhood you love, and focus on what matters most to you. The best part of this solution is the income. Renting out a two-, three-, or four-bedroom home brings in thousands of dollars every month. It can be enough to support a lifestyle of travel, or to supplement your retirement income.
6. Some (or all) of the above
One of the best things about an accessory dwelling is its versatility. A New Avenue ADU is a high-quality home that will last for generations. That means it can have many different uses over its long lifetime.
You can build a backyard music studio now and rent it out as a home later.
You can build an ADU for your son or daughter and then swap homes when they start a family.
You can add a rental ADU, save the income for your kids’ education, and then have them live in it while they go to school.
You can do whatever is right for you and change the use as your needs and lifestyle shift over time.
What will you do with your accessory dwelling?
Schedule your free call today. We’ll answer all your questions and connect you with the design–build team that’s perfect for your project.
