Complete Guide to Building an ADU in 2026: Costs + Planning

An Accessory Dwelling Unit (ADU) is a secondary residential unit built on the same property as a primary home. It functions as a fully independent living space with its own kitchen, bathroom, and sleeping area.

ADUs are also called:

• Granny flats
• In-law suites
• Backyard homes
• Garage conversion apartments
• Secondary dwelling units

Many cities now support ADU development with more flexible regulations because they provide additional housing without purchasing new land .

ADUs are popular because they provide both financial and lifestyle benefits .

RENTAL INCOME OPPORTUNITY

An ADU can create a steady source of passive income by renting the unit long-term or using it as a short-term rental (where allowed).

Estimate potential returns using the ADU ROI calculator →

INCREASE PROPERTY VALUE

Adding an ADU often makes a property more attractive to buyers. Homes with extra living space and rental potential can command higher resale value .

MULTI-GENERATIONAL LIVING

ADUs are ideal for families who want to live close together while maintaining privacy. They are often used for:

• Aging parents
• Adult children
• Extended family members
• Live-in caregivers

This allows families to stay connected without sacrificing independence .

FLEXIBLE LIVING SPACE

Even if you don’t rent it out, an ADU can be used as a:

• Guest house
• Home office
• Creative studio
• Private retreat

This flexibility makes ADUs one of the most versatile home additions .

The right type of ADU depends on your property layout and goals.

DETACHED ADU

A detached ADU is a separate structure in the backyard. It provides the most privacy and is often preferred for rental use.

ATTACHED ADU

An attached ADU is connected to the primary house, which can simplify utility connections.

GARAGE CONVERSION ADU

Converting an existing garage into an ADU can be a faster way to create livable space using an existing structure.

JUNIOR ADU

A junior ADU is a smaller unit created within the existing home, typically using extra space like a spare bedroom.

Before starting construction, it’s important to check if your property is suitable. Key factors include:

• Lot size
• Zoning regulations
• Available backyard space
• Utility access
• Local building codes

Start evaluating your property using the ADU planning portal →

Many homeowners finance ADU projects since the unit can generate income over time. Common financing options include:

• Home equity loans
• Cash-out refinancing
• Construction loans
• Specialized ADU financing programs

Check your eligibility using the ADU Loan Qualifier

For many homeowners, building an ADU is a long-term investment that increases both property value and financial flexibility.

ADUs allow you to:

• Create rental income
• Expand living space
• Support family housing needs
• Increase property resale value

Plan your ADU project with these tools:

• ADU Planning Portal
• ADU Cost Calculator
• ADU Loan Qualifier
• ADU ROI Calculator

Planning Tip: Before hiring designers or contractors, use an ADU calculator to understand your project’s feasibility and potential return. Early planning can help avoid costly surprises.