Real Estate

How an ADU Can Affect the Resale Value of Your Property

By  | 

Many homeowners are now building Accessory Dwelling Units (ADU), which are also known as personalized backyard homes, on their properties in a bid to counter housing shortages. An ADU is also known as a backyard cottage, or a granny flat, and it has all amenities found in the main unit of the house. These secondary dwellings are primarily designed to accommodate aging parents, and help grown children adapt to being independent in a separate unit near their homes. They also help generate passive income for property owners. However, the main question to homeowners is, “How can an ADU affect the resale value of your property?” 

Factors to Consider When You Want To Build An ADU

When you want to build an ADU behind the primary dwelling, you must make sure that it conforms to all state and local government code requirements. You must also ensure that the ADU meets the building and energy code requirements in your respective city. To achieve this, you can try to look for details about how to build an accessory dwelling unit from ActonADU so that you do not violate the municipal bylaws that set standards for erecting new structures. It is crucial to ensure that the secondary dwelling does not impact the image of the community at large.  

ADUs Constitute Long Term Investment

Every homeowner’s wish is to maximize the value of their property by generating revenue from rentals as well as future sales. Therefore, an ADU constitutes long term investment that will significantly increase the value of your property if you want to sell it in the future. According to recent studies, an ADU contributes to about 25% to 34% of the property’s value. In the same vein, an ADU contributes to about 51% increase in the resale value of your home. You actually stand to gain more money than the original purchase price if you decide to sell your home with an ADU. Another aspect to consider is how a standard ADU usually costs about 25% of the primary dwelling to construct. If the new structure can contribute to more than 50% of the resale value of your property, then you can recoup the expenses incurred. On top of that, you can also gain a handsome profit from the resale of your property.  

Essentially, the idea of building an ADU is wise if you have underutilized space in the backyard of your home since it helps to increase the value of the property. A secondary dwelling can help the homeowner generate passive income from rentals against the backdrop of the increasing demand for housing in different places. This automatically increases the resale value of the property if it consists of a well structured ADU.  

Safety and Accessibility    

There are also other reasons why an ADU is viewed as a big investment. Homeowners who seek to add value to their lifestyles can consider secondary dwellings on their properties. ADUs help keep families closer, and this is crucial since it helps maintain a strong bond between members on a given property. An ADU makes access between family members easier when they stay within close range. This helps improve the quality of life for the family members, while at the same time eliminating costs of care assistance for the elderly. The agents in the real estate industry consider all of these factors, which helps them determine the value of the property when it is sold. 

ADUs Improve Privacy

Another reason why an ADU can increase the value of your property is that it helps improve privacy among members sharing the property. Improved privacy helps remove the inconveniences that include sharing kitchens and bathrooms among family members, which can cause tension. ADUs also help minimize clutter, and these factors are vital, since they can increase the value of your property. 

Downsides Of ADUs

The flip side of ADUs is that they can lower the value of the property if they fail to meet the expected standards. All buildings in each residential area should conform to certain standards so that they can help preserve its value. ADUs that lack proper planning often fail to meet these standards, which can negatively impact the resale value of the property. Before building an ADU, homeowners should make sure that they have sufficient space in their backyards, so that they can construct attractive structures. If the secondary dwelling is done in a haphazard manner, there is a risk that it can be unsightly. This can take a huge toll on the value of the property, which can slump significantly as a result of poor planning. 

While every homeowner has a right to build an ADU on their property, they need to find out from specialists if it is suitable to do that. A secondary dwelling should be designed according to the free space in your backyard. Instead of improving the value of your primary property, a poorly designed structure can prove to be a disaster when you want to sell your home. An ADU should have all the amenities that you can access in the main house, so that it can be valuable. However, apart from these shortcomings of ADUs, the benefits outweigh the disadvantages. As long as the homeowners take the necessary steps to ensure that the secondary dwellings conform to the set standards, chances are high that they will increase the resale value of the property. If your backyard is big enough, you can never go wrong if you build an ADU.   

ADUs are significantly gaining popularity amidst the current housing crisis in different neighborhoods. Homeowners can add value to their properties by constructing secondary dwellings that generate passive income from rentals. These dwellings also help to enhance social relationships between family members. All these factors contribute to an increase in the resale value of your property in the future. In other words, an ADU is a long term investment that can easily become valuable equity. However, an ADU should meet the expected standards set by the local authorities to gain value; otherwise, the opposite might happen if it is substandard. 


Sasha Duncan is a bookworm, fashion enthusiast and a consultant for Palmaira, a supplier of the best Menorca sandals Australia has to offer. She loves reading crime novels and being with her dogs, Maya and Buster.

You must be logged in to post a comment Login

Leave a Reply