The Ultimate Guide to Understanding the Cost to Build an ADU

The construction costs are the most significant expense when building an ADU. They can vary based on the size, materials, and quality workmanship of your ADU. The average cost per square foot to build an ADU is $350-$500. An ADU of 500 to 1,000 square feet will cost anywhere from $200,000 – $500,000. Factors that will impact your construction costs include labor costs, material costs, and also the location of your ADU.

4. Financing Costs

Most homeowners will finance their ADU through home equity loans or personalto  loans. Interest rates for home equity loans range from 4% – 8%, while personal loans can be as low as 3%, depending on your credit score. Understandably, the financing costs also vary depending on the size of your ADU, the chosen financing option and the length of the loan. On the other hand, renting out your ADU can generate a stable source of income and help recoup some of the costs over time.


Frequently Asked Questions (FAQ) about Accessory Dwelling Unit (ADU) Construction

What is an ADU?

An Accessory Dwelling Unit (ADU) is a secondary, self-contained residential unit that is typically located on the same property as the primary dwelling. It can be a separate structure or integrated into an existing building.

Why consider building an ADU?

ADUs offer several benefits, including additional rental income, increased property value, and the opportunity to house family members or caregivers while maintaining privacy.

What types of ADUs are there?

ADUs come in various forms, including detached ADUs (a separate structure), attached ADUs (an extension of the primary home), and converted ADUs (existing space within the primary home converted into a separate unit).