ADUs, or Accessory Dwelling Units, are small homes typically attached to a larger residence like a guest home or a granny flat. In fact, many Accessory Dwelling Unit builders are convincing the state of California to allow these types of units to act as their own independent units. In order to keep up with housing demands without making the state’s real estate market completely unaffordable, ADUs have begun showing up on the scene. So, does an ADU increase home value in California?
Does an ADU Increase Home Value in California?
But many residents are curious about the benefits of owning and living in an ADU. Are these homes secure and supportive while also being affordable? Does an ADU increase home value in California? In other words, will they be worth anything when the time comes to sell?
Keep reading as we answer all of these important questions and more.
ADUs = Perfect Pandemic Pods
The California housing market saw a real rise in the popularity of ADUs during the height of the COVID-19 pandemic; families displaced by illness or volatile market conditions were able to convince the state to allow the deregulated development of these small homes. While it has been difficult to avoid rising rent costs across all types of real estate, these types of homes can significantly increase in value over time, making it easy for families to pay off their debts.
How Do ADUs Increase Home Value?
How can a unit so small create an increase in home and property value? Like any type of dwelling, if you put love and hard work into it, you will get more out of it than what you put in. Appraisers find ADUs to be equatable to regular homes, making them a perfect fit for anyone looking for a smaller space and reduced fees.
According to recent studies, depending on the type of remodeling project you have in mind for your ADU as well as its location, average homeowners can expect to add between $200,000 and $500,000 to their home value, making it one of the most spectacular rates of ROI in real estate. This is a good sign for low-income households looking for an affordable place to live that will also help them earn passive income in the future, as well as renters looking to expand their profits without having to go all in on expensive real estate deals.
Renting an ADU
If you want to rent an ADU from a local landlord or you want to purchase ADUs to rent out yourself, you first should consider the pros and cons of running such a unit. These habitable spaces are classified as homes, although they can be rather small. This means that maintenance needs are light, making it great for someone who is not able to do a lot of cleaning on their own.
Logistically, ADUs are also a good idea for anyone running a short-term rental service. Depending on the local laws in your area, you may be able to host your ADUs on a website such as Airbnb for a reduced price (and a stellar profit to you).
Hire the Best ADU Builders Today
If you are looking to build your own Accessory Dwelling Units from the ground up, you will have the most success doing so with an award-winning build firm. No matter your income restraints or renovation needs, an ADU is sure to be a good fit for you. If nothing else, you can put in some work to increase its value significantly over time, making yourself a good profit in a few years. Contact one of our experts today to learn more about the benefits and drawbacks of ADUs.