Step 1: how to start ADU project

Planning is key. We have recently interviewed a homeowner, who is about to start her fifth construction project in the Bay Area. It took her close to a year to get ready for permit application for her 5th house! Of course, ADU home is smaller than a typical main house, but it has all the detail of a standard building, thus a lot of details to think about.

How to start ADU?

It takes time to make decisions. But the more restrictions you have, the easier it becomes.

Why are you thinking of an ADU?

Why are you even considering an ADU? This WHY is the most important step in the construction process. As soon as you find that personal reason, the process becomes less stressful and more successful. We promise. And it is the same for any construction project. You can read more about it if you want a deep dive into planning a construction project.

There is a reason that goes back centuries why the architects start with programming (what rooms, what size), then move to conceptual design and only then to detailed design and drawings (visualization). ADU homes are no different. Before you start your ADU project, decide on the goals.

Sometimes an ADU is not an option, then we encourage you to consider an addition – might work better for you and your property. We have developed a whole Trello Board for those of you who need help thinking this decision through.

How much can you afford to spend on ADU?

We encourage you to determine your budget at the start of your project – before you start calling the builders. In September 2020, you could definitely build a 500-550 sf ADU with the most modern design you have ever seen for $200,000, event if it sits on a slope. This is close to $400 per square foot with a fixed contract that covers everything. Fast forward to June 2021 – the $200,000 will cover a 430 sf modular unit on a flat lot. Lumber prices are up three times, and they impact all builders – custom and modular.

We have seen anything from $250 per square foot for garage conversions to $1000 ( in fact, the sky is the limit) for detached ADUs built as luxurious guest houses. Just remember that the smaller the ADU, the higher the cost per square foot. If you need some help wrapping your head around current prices, this is the best article we have seen on the subject of home-building costs with great illustrations.

Please check the costs for San Mateo county here.

You can also use the calculator by LoanDepot to determine how much an ADU might cost in your county.

What should your ADU budget include?

If anyone is quoting you a much lower number than everything else you have seen so far, check their license, references, and ask if the costs below are included:

  • engineering drawings, architect and/or designer fees
  • city fees for building permits and inspections
  • connection to utilities (fees and trenching)
  • foundation
  • building materials and labor
  • finishes (wall tile, paint, flooring)
  • transportation costs and crane rental if modular
  • site setup (i.e. fence, temporary toilet for the crew)
  • water heater, HVAC
  • solar panels (required for new construction since January 2020)
  • appliances (stove, washer, dishwasher)
  • kitchen cabinets, storage units
  • landscaping
  • construction waste disposal

You will have to add some furniture for your ADU home plus some light fixtures on top of the above. You see, why so many people struggle with how to start ADU project.

Something to consider when dealing with costs per square foot:

The smaller the ADU, the bigger the cost per square foot. Main culprit? Fixed costs spread over a smaller number of living space. Here is an example:

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