What does ADU mean

Find some answers to popular questions

about ADUs.

Accessory Dwelling Unit – what does it mean?

A secondary home, on the same lot as the main house, that provides sleeping, eating and hygiene comforts. It can be detached, attached or converted from existing space. 

What does ADU mean in real estate? Property value increase. Option for additional rental income. Flexible housing that lets you host extended family or downsize without selling.

For kids? For parents? Modern? Traditional? 2 bedrooms? 2 bathrooms? Attached? Detached? Junior? Custom? Modular? Home office? Guest house? What is a priority – cost or time? 

As restrictions on our lives are thankfully beginning to ease, many of us are wondering which, of all the many changes brought to our daily lives by the Covid-19 pandemic, may be here for good. Will we continue to work from home, at least part-time? Do we actually prefer taking exercise at home rather than in a communal gym? Would our elderly family members, who stayed with us so we could care for them better during the pandemic, like to live with us more permanently?

If any of these lifestyle changes do in fact become the new normal for us, then an Accessory Dwelling Unit (or ADU for short) might be just what we need. So, what is an ADU and what can they offer us?

What makes it an ADU?

Also known as in-law units or in-law apartments, these are fully functioning independent, living spaces built on the same land as your main home. They might be a converted basement or attic, a detached separate structure like a converted garage or a new-build small cottage. What they have in common is that they are secondary units to an existing property and they use the same utilities as the main home. Their size can typically vary from 600 to 1200 square feet. Although they have their own entrance, they are legally part of the same property as the main home and can’t be bought or sold separately. 

For many families, an in-law unit is the perfect care solution for older family members who still value their independence. It’s the perfect blend of having company and support close at hand, whilst still having your own front door.  For other families, the in-law unit can actually cater for the younger generation, offering hang-out space for teenagers or even a home for a young adult who can’t afford to buy or rent their own place just yet. 

But what about that home office? Now that working from home is likely to be a more permanent feature of our working lives, many of us feel the need to have separation of our working and domestic lives. Working on the dining table or in a spare room just isn’t  sustainable long-term, especially, when you need privacy for conference calls or face to face meetings . An ADU can give your that vital psychological life/work distinction. 

If you used to stop off at the gym on the way to or from work, then why not incorporate a small home-gym into your ADU home-office?  Even if you just have a free 20 minutes at lunch time, it’s there waiting just for you. 

ADU as a source of income

Aside from personal use, many homeowners are choosing to build an ADU for rental as a valuable source of supplementary income. Maybe you’d like a little extra help to pay the mortgage or provide some extra retirement income. You could even move into the ADU and rent out your main property for periods of time. Very importantly, a well-executed ADU can increase the value of your property by as much as 20-30%. Homes for sale with an in-law unit are an extremely attractive proposition.

ADUs are becoming increasingly popular throughout the country and many states actively encourage them, seeing it as one solution to the urban housing crisis. However, local municipalities may place restrictions on their development, so you must check on your local regulations.

Advantages of building an in-law unit as ADU

Recently, new legislation that makes it easier for homeowners to build Accessory Dwelling Units (ADUs) has come into effect in California. This legislation could not have come at a better time as ADU homes solve many issues, including reducing the housing crisis in California and giving homeowners the ability to turn their property into a…

Costs of getting a building permit for your ADU

How much does it cost to get a permit for an accessory dwelling unit?It does not matter if you are building your accessory dwelling unit with a modular company, or a custom backyard cottage with a traditional stick-built builder, you will need to get the building permit from your city. There is no escaping this…

Convert a detached garage into an ADU

A garage conversion might be the least expensive option for adding living space if one can confirm the structural integrity of the foundation and walls.

Green Building and ADUs

How do CalGreen Building Code requirements relate to ADUs? CalGreen Mandatory Measures are a requirement of the California Green Building Standards Code. These mandatory measures are required on all new homes and residences. Furthermore, they also apply to additions and alterations which increase the building’s conditioned area, interior volume, or size.  But be careful, not…

Estimating change orders

We have written before about what you should expect to see in your ADU budget. We encourage you to make sure your budget includes all the big line items. As our founder likes to repeat, you cannot save money during ADU construction. You can only save money at the planning stage, when you are discussing…

ADUs and insurance policies.

If you have recently added an ADU – make sure you do not forget to include it in your insurance coverage – it might go under “other structures”. Actually, updating insurance is one of the most often forgotten things at the end of the project. Learn more about the technicalities of wild fire insurance policies…

Keeping our homes from burning

We love revealing myths. Let’s reveal some myths about causes of fire. If you own a home or are thinking of building a home or an accessory dwelling unit, spend 8 minutes on this video. 30% of US homes are in Wild Urban Interface zone (a.k.a. WUI zones). These are borderline zoned between wilderness and…

Ways to finance your ADU

If you are wondering what is the best way to finance your ADU, here is a chart from an experienced mortgage broker that should help you out. There is no simple way to finance an ADU, most people use several solutions to get to the finish line. And it is always a variable between your…

Questions for contractor’s reference

What are the right question to ask your contractor’s previous client (reference)? If you think that it is not necessary to talk to previous clients, think again. If you think that you are making the contractor uncomfortable, don’t. Most of the time you can get away with one question – would you hire this contractor…


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Our posts and articles are for information purpose only, and they are not meant to be investment or legal advice.