In a house, an additional Accessory Dwelling Unit (ADU) is bound to add lots of space. You can use this space as a storage unit, make it into a bedroom that you and your family can use, or rent it out to generate some extra income. However, from an investor point of view, an ADU construction is a great investment to get an increased property value.
An ADU can add as much as 30% to a property’s value. On average this number lies between 10% to 25%. But the property value increase also depends on the location of the ADU, its size, and the construction quality.
On the other hand, if we were to calculate the value that an ADU adds to a property in terms of the return on investment (ROI), it depends on the cost of construction, expenses towards tricky zoning regulations, permit costs, property type, and local market conditions.
How Much does it Cost to Build an ADU in California?
Adding an ADU to the house is probably one of the wisest investments one can make, especially if the goal is to sell the property or put it on rent. In California, the cost of an ADU construction comes around to $275,000. But the cost can vary depending on the furnishings and the construction methods. The cost of adding an ADU in California is lower than the national average of $350,000.
However, the cost of building an ADU is small compared to the value it adds to the property. In most cases, the return on investment for an ADU in California can be up to 50%.
Does an ADU Add Value to Your Home?
While an ADU adds value to a property, one cannot be sure about the exact value it will fetch. ADU construction is costly, and the owner might not know whether they’ve done a good investment till they put the property on the market.
A great way to go about this is to put the property up on the market and assess the offers. If the offers are less than the demand price, the property might benefit from an ADU construction.
Furthermore, it might be a great option to consult experts like Creekside Pro Construction before you make the decision. They will first assess your lot and then tell you whether you should invest in an ADU construction or not.
To the buyer, an ADU might be attractive because it allows them:
- Extra storage.
- A place they can use as an office – away from the hustle and bustle in the house.
- A place they can rent to cover their mortgage payment.
The ROI on an ADU might be as low as 5%-10% or might be as high as 50%. In the best-case scenario, a $350-400K ADU construction could fetch a $600K return in California. The high return depends on the ability to rent the ADU which is determined by:
- The furnishings in the ADU
- The quality of the ADU construction.
Grow Your ROI With Creekside Pro Construction
Because quality is a huge factor in fetching a high ROI for ADU construction, it is wise to go for experts like Creekside Pro Construction for your ADU construction.
If you’re ready to start on your ADU construction or are seeking advice regarding this decision, you can schedule a free consultation today!
After the consultation, when you’re ready to begin our team will handle all the architectural work, engineering, and energy calculations to create a complete set of blueprints for the approval after which the work starts!
