All across Southern California, homeowners are considering accessory dwelling units as a relatively low-cost, high-return investment option. Not only does adding an independent living space to a residential property increase its value significantly, but it also offers tremendous lifestyle and economic flexibility. EcoSmart Builders specializes in providing the best accessory dwelling units Los Angeles has to offer.
If you are wondering if adding an accessory dwelling unit (ADU) raises the value of your home — or if you’re wondering exactly how much value an ADU adds to your home — you’re certainly not alone. Many Southern California homeowners are seeking alternative methods of obtaining substantial long-term income, and ADUs are an excellent solution. However, the value of an ADU depends upon what kind of ADU it is.
There are three broad categories of ADU: attached ADU, detached ADU, and garage conversion. While all three are good investment options, some will add more value to a property than others. Here’s a breakdown of the types of ADUs and how much they can add to the value of your home.
Any accessory dwelling unit that is completely structurally independent of the primary dwelling is considered a detached ADU. This tends to add the highest value to a property because it’s essentially having a small, separate home on your lot. Not only are you adding high-value living space to your property that appraisers will use to calculate your home’s value (the average price per square foot is roughly $470 in Los Angeles), but you can also rent the space at a premium. Many single-family residential property owners have doubled their ROI with a detached ADU.
Any ADU that is connected to the primary dwelling is considered an attached ADU. While it can substantially increase the value of the property, it doesn’t raise it quite as high as a detached unit. This is because it affords somewhat less privacy than an entirely separate structure, and it doesn’t add as much square footage in terms of increasing the size of your home.
Garage conversion ADUs tend to be the most popular types of ADUs because they are the quickest to complete and the least expensive. Moreover, homeowners who convert their garage space with the intent of renting the unit find that the short-term ROI is substantial — property owners discover that they can pay off the entire cost of the addition in less than five years. However, a lack of garage space can decrease the property value somewhat.
It can be a challenge to choose which type of ADU best suits your goals, lifestyle, and budget. However, the team at EcoSmart Builders is more than happy to consult with you to determine the best strategy for both the short and long term. To learn more about our services, please visit our ADU information page.