Build Your Own Backyard Accessory Dwelling Unit (ADU) – Benefits of a Backyard Guest House or Granny Flat

Everything You Need to Know About Backyard Accessory Dwelling Units (ADUs)

So you’ve been searching for info on backyard ADUs, eh? Well wonder no more – this article aims to answer all your burning questions about these handy secondary living spaces. As someone who’s built three ADUs from scratch, I’ll share my insider knowledge and hopefully alleviate any concerns you may have.

What exactly is a backyard ADU?

In short, an ADU (sometimes called a “granny flat” or “casita”) is a small, independent residential dwelling constructed on the same lot as a stand-alone single-family home. They’re often built above garages or in backyard areas. Basically, it’s like having a tiny rental house in your yard!

ADUs can come in all shapes and sizes, from tiny studio apartments to larger one-bedroom units. Some have basic amenities, while others are fully loaded with kitchens, laundry, and more. The key things are that ADUs are secondary to the primary home, much smaller in scale, and located on the same residential lot.

Why would I want an ADU?

There are several good reasons folks opt to build an ADU:

  1. Rental income – ADUs provide an additional source of monthly cash flow by renting it out long or short term.
  2. Aging in place – Family can stay close by moving into the ADU as they get older.
  3. Student or guest housing – It’s perfect for kids back from college or visiting relatives.
  4. Property value – Yes, an ADU can actually increase your home’s worth!

From my experience, the rental income potential is a huge motivator. Even a basic 500 sq ft unit can fetch $1500-2000/month in rent around here. Not too shabby for using leftover space, eh?

Is building an ADU difficult?

The level of difficulty depends on the design and your skills. Having some construction know-how helps, but it’s definitely possible for a DIY novice too.

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Simple detached units like a garage conversion tend to be easier than attached units like above-garage flats. Look for pre-engineered plans that simplify the building process. Also consider hiring subcontractors for tasks like plumbing/electrical that require expertise.

Permits can pose a challenge if you’re in an area with strict regulations. Do your research ahead of time so there are no surprises. With planning, an ADU build is very doable for most folks on weekends and evenings.

What about zoning rules and permits?

This is one of the biggest hurdles folks face, so it’s important to fully understand the process. Zoning ordinances regulate things like unit size limits, parking requirements, and setbacks from property lines.

Most cities now allow ADUs to help address the housing crisis, but some “NIMBY” zones still ban them. Contact your planning department to see if your property qualifies. Expect a long wait for design review with the planning commission.

You’ll also need usual construction permits for foundation, electrical, plumbing, etc. Getting pre-approved engineered plans can speed things along. Hiring a planner may help navigate the red tape.

How much does an ADU cost?

Costs range widely based on unit size, features, and building materials. A basic backyard cottage runs $150-250k fully built. Conversion projects from existing structures tend to be more budget-friendly at $100-150k.

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Major expenses include foundation/framing, utilities extension, finishes like cabinets/flooring, and permit/plan fees. You can save by doing the easy work yourself like cosmetic upgrades later. Always get multiple contractor bids to find the best deal!

With rents of $1500-2000/month around here, a typical ADU pays for itself within 5-10 years. Not too shabby a return on investment if you ask me!

Any other considerations?

A few other things to think about when going the ADU route:

  • Increased property taxes – Most places assess higher taxes once an ADU is built.
  • HOA/CC&R restrictions – Some homeowners associations don’t allow ADUs, so check the covenants.
  • Insurance – Make sure your policy adequately covers both structures.
  • Future plans – Will you keep renting long term or use it yourself down the line?

Weigh the pros and cons for your specific situation. An ADU isn’t right for everyone but can be a sweet deal if you go in with open eyes.

Any parting words of wisdom?

I’d leave you with this – take the ADU plunge only if you have the bandwidth to manage it. Be ready to screen tenants, make repairs, handle turnovers and the like. A vacant month here and there won’t break you, but stable long-term renters sure make things easier.

Always get your permits squared away properly – nothing but headaches await if you try to skirt the rules, trust me! Hire licensed contractors when needed too. Oh, and don’t forget to have fun with the design – make it your own creative oasis!

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Hope this mega-overview of all things ADU gave you clarity on whether pursuing one makes sense for your situation. Feel free to ping me if any other questions arise. Buena suerte out there!

Comparing Backyard ADU Sizes and Costs

Size Number of Bedrooms Number of Bathrooms Estimated Construction Cost
400 sq ft Studio 1 bath $100,000-$150,000
600 sq ft 1 bedroom 1 bath $150,000-$200,000
800 sq ft 2 bedrooms 1 bath $200,000-$250,000
1000 sq ft 2 bedrooms 1.5 baths $250,000-$300,000
1200+ sq ft 2+ bedrooms 2+ baths $300,000+

FAQ

  1. What is a backyard adu?

    An adu, which stands for accessory dwelling unit, is essentially a self-contained living space that’s added to a single family home’s property. Most commonly, an adu is built above a detached garage or built as an addition to the main house.

  2. Do I need permission to build an adu?

    Generally speaking, you’ll need to check with your local government about any permits or approvals required for an adu. City rules on things like minimum lot sizes, parking requirements, and overall building size can differ tremendously place to place. So it’s wise to figure out your area’s regulations before making big plans.

  3. How much does an adu cost?

    Construction costs can vary greatly based on materials used and the type of unit being built. But on average, expect to pay somewhere in the range of $100,000 to $200,000. Some cost-saving options are converting an existing structure like a garage rather than building from scratch. You also may save a few bucks using basic interior finishes as an adu often serves as a rental.

  4. Can I rent out an adu?

    In many cities and counties, renting out an adu on your property by the month is totally fine and a great way to earn some extra cash flow. Be sure to check your local regulations though because some places limit short-term vacation rentals. Getting the unit properly permitted and following rental rules can help avoid any issues down the road. Not everyone is a fan of airbnb-style guests, if you catch my drift.

  5. Are there tax benefits to adus?

    Interestingly enough, there can be some perks to building an accessory dwelling unit in regards to taxes. Rental income from an adu is generally reportable. However, you may be able to deduct certain expenses like mortgage interest, property taxes, and maintenance costs. Plus, the construction of an adu may increase your home’s value and save you bucks in the long run. It never hurts to chat with an accountant about your specific tax situation.

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  6. What are some downsides to adus?

    As with anything, adus ain’t all sunshine and rainbows. Some potential drawbacks include loss of privacy for homeowners with renters on site. Extra vehicles in the driveway or loud guests could basically annoy you as well.HOA rules may prohibit or limit adus in certain neighborhoods.And maintaining rental properties requires time and effort that not everybody has. So weigh the pros and cons carefully for your situation.

  7. Should I build a detached or attached adu?

    There are arguments for both detached and attached accessory dwelling units. A detached setup preserves more backyard space and privacy. However, building above an existing structure like a garage can markedly decrease construction costs compared to ground-up development. Attached units tend to be more energy-efficient too since they share walls. In the end, factors like your property layout and budget will help determine the best option.