Top 5 Benefits of Adding an Accessory Dwelling Unit to Your Property
Over the last few years, accessory dwelling units (ADUs) have been on the rise.
According to a study conducted by Freddie Mac, there are 1.4 million single-family properties with ADUs across the nation. Between 2009 and 2019, first-time listings of ADUs increased by an average of 8.6% year-over-year, and the growth has been especially pronounced in California, Florida, and Texas.
So what’s driving this hot new housing market trend? Read on to find out!
In this article, we’ll go over what an ADU is and the top five reasons to add one to your property. Let’s get started!
What Is an ADU?
An accessory dwelling unit is a small secondary residential unit that sits on the same lot as another (usually larger) primary property. It sometimes goes by other names, such as a granny flat, in-law suite, or garage apartment.
To qualify as an ADU, a structure must have all the necessary amenities for living. These include a bathroom, kitchen, electricity, running water, heating, cooling, and so on. It must also have a separate entrance from the main property.
There are three main types:
- Attached ADUs are those that share a wall with the main property, such as an attached garage that’s been turned into a living space.
- Detached ADUs are those that stand separate from the main property, such as a cabin or detached garage apartment.
- Internal ADUs are those that exist entirely within the main property, such as a basement or attic apartment.
Do you have extra space on your property that could be used for an accessory dwelling unit? RSP Group can help you plan, design, and build it so you have extra income and extra living space.
The Benefits of ADUs
Now that you know what an ADU is, here are five reasons you may want to add one to your property:
1. Earn Extra Rental Income
Adding an ADU to your property is a great way to earn extra rental income. According to United Dwelling, ADUs in high-demand areas can bring in anywhere from $1,500 to $3500 monthly!
You can rent out your ADU to long-term or short-term tenants. Ideal long-term tenants would be single renters or those who want to downsize. The U.S. is in the middle of the worst affordable housing crisis in history, so demand for smaller living units is high. By adding an ADU to the housing stock, you can help create more affordable housing.
Alternatively, you could rent out the ADU as a short-term rental (STR) by listing it on platforms like Airbnb or VRBO. Either way, there’s a lot of passive income potential.
2. Raise Your Property’s Value
On top of generating rental income, ADUs can help your property appreciate. According to United Dwelling, an ADU can increase the value of your home by up to 30%.
How? By adding more living space to your property and providing future homeowners with all of the same benefits that an ADU gives you.
In addition, an ADU can help your house stand out more whenever you go to sell so that you can generate more interest and let the competition drive up your home’s price.
3. Host More Guests
ADUs let you host more guests. Don’t have enough space in your house to comfortably fit your family or friends from out of town? No problem. An ADU can provide the extra space you need and allow your guests to have some privacy while they stay.
This is especially nice as you get older and your kids move out of the house. When they come back to visit with their own families, they won’t have to feel as cramped.
4. Have a Designated Home Office
Since the COVID-19 pandemic, working from home has become more widespread. According to the U.S. Census Bureau, between 2019 and 2021, the number of people primarily working from home tripled from 5.6% (roughly 9 million people) to 17.9% (27.6 million people).
If you’re a remote worker and you’ve been working out of your living room or a closet, now may be a good time to invest in a designated home office space in the form of an ADU.
ADUs can be great home offices because they give you your own space to focus—further away from the distractions of home. If you run your own business, they’re also a great place to meet clients without requiring them to enter your actual home.
5. Create Multi-Generational Living Arrangements
Lastly, an ADU can be a great way to provide living accommodations for multiple generations. For example, your adult children who may be going to college and haven’t yet started their careers may benefit from living in an ADU to save on living costs. This is a great way to keep them close by while still giving them their own space.
Or you may have elderly parents who can’t (or don’t want) to live on their own. An ADU can provide a good low-cost housing solution for them (or even their caretakers).
The point is that ADUs are very versatile and may be just what you need to comfortably accommodate everyone in your family.
How to Get Started With Adding an ADU to Your Property
At the end of the day, there are many reasons to invest in an ADU for your property. But before you do, you need to check your local housing regulations to see if they are permitted and what the rules are.
Some areas place limits and restrictions on the size, style, and occupancy level of ADUs. Some limit how you can use them. For example, you may not be allowed to rent it out or you may only be allowed to rent to long-term tenants.
So it’s crucial that you verify what the ADU regulations are at your location before you get started on building one. From there, you can choose to build one yourself or hire a professional contractor to do it for you.
Here at RSP Group, we have years of experience building custom ADUs for our clients. To learn more, feel free to contact us today! We look forward to chatting.
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