Is an Accessory Dwelling Unit Right for You? Here’s What To Know

Is an Accessory Dwelling Unit Right for You? Here’s What To Know

Struggling to find a home within your budget, or need extra income or space for family? Accessory dwelling units (ADUs) might be the answer.

What Is an ADU?

Fannie Mae describes an ADU as a small, separate living area on the same lot as a single-family home, complete with its own living, sleeping, cooking, and bathroom spaces. ADUs can vary in type, including detached units like backyard cottages, attached extensions with separate entrances, or converted garages.

• Within a main home, such as a basement apartment
• Attached to a main home, such as a living area over a garage
• Detached from the home entirely; it could even be a manufactured home

The Benefits of ADUs

ADUs are increasingly popular, with a recent survey revealing that 24% of agents note that features like a mother-in-law house are highly sought after by buyers today.

Why ADUs Are Appealing

The increasing popularity of ADUs is understandable amid rising living costs. An ADU can boost your income, helping alleviate financial pressure. Whether you purchase a home with an existing ADU or build one, you have the option to rent it out and offset your mortgage costs.

Key benefits of ADUs, as noted by Freddie Mac and AARP, include:

• Living Close, But Still Separate: You get the best of both worlds — more quality time together, plus privacy when you want it. If that sounds like a win, it might be worth looking for a home with an ADU or adding one to your home.
• Aging in Place: Similarly, ADUs allow older people to be close to loved ones who can help them if they need it as they age. It’s a sweet spot that offers independence and support from loved ones. For example, if your parents are getting older and you want them nearby, this could be a great option for you.
• Built-In Childcare: If your family’s living in the ADU, you may be able to use them for childcare, which can also be a big cost savings. Plus, it gives your kids more time with their grandparents.

ADUs: Key Considerations

ADUs, situated on the same lot as a primary residence, typically cannot be sold separately. However, this is changing in some regions, though regulations still vary widely. It's crucial to consult a local real estate expert for current guidance.

Bottom Line

Considering an ADU in your home purchase or adding one to your property could be a strategic move in today's market. Ensure you discuss with a real estate agent to understand local housing codes and explore available options.

Why are you interested in ADUs?