What is an ADU?

As a Design & Build firm here in San Diego, ADUs have become our bread and butter. Before we dive into the reasons building an ADU on your property is such a great idea here in San Diego and why so many of your neighbors are doing it, we wanted to make sure everyone was on the same page first. Whether you refer to it as a granny-flat, in-law suite, guest-house or something else, an ADU (Accessory Dwelling Unit) is most simply defined as a secondary, or “accessory”, residence, in reference to the property’s primary residence. ADUs can look a variety of different ways, but the most common include an above-garage unit and detached, backyard 2-3 bedroom builds. They can also range in size, from a couple hundred square feet garage additions up to 1200 square feet new construction and everything in between. ADU styles typically match the primary residence, but not always, and are usually constructed more strategically than a home, with their use and value as an investment in mind.

If you’d like to read more about the specific details of what California and a few of the various cities within San Diego County require of an ADU, things like floor plans, size, height limits, environmental impact, etc., please click here.

Over the course of this blog, we will use this definition and the points mentioned above to discuss 5 reasons why building an ADU is a great idea for San Diegans and how this impacts not only our families, but our communities and our wallets as well.

#1 The impact on your family

Our first reason is an important one, because when you consider the term “ADU” people typically assume that they’re “Granny Flats” or “In-Law Suites” when in reality, their application to the family can be much more than that.

ADUs can provide home owners with more flexibility in their retirement than one may realize. For many, ADUs can help them afford retirement here in California by renting our primary residence and down-sizing into the ADU. Additionally, ADUs can even aid in one’s mental & physical healthcare plans by allowing them to age in place, remaining in their communities and near family.

While the options for those entering into retirement and looking to age in place are endless, ADUs can also applies to families looking to create space for the opportunity to bring their families closer together. For example, whether their is an adult child looking to move back home and be closer to their parents or help take care of them and their property, or siblings who want their own children to spend more time together, ADUs allow for families to find a way to come back together, even if it’s just for a short period of time.

#2 Your Family’s Financial Future

The impact an ADU can have on your family is as important now as ever, for when you think of families today, you very rarely think of an especially tight-knit group, especially beyond the immediate family. However, if your family isn’t looking for the additional proximity, another reason you may want to consider building an ADU on your property is the impact it can have on your family’s financial health.

First, when you add improvements such as another home to your property, as you know, they will ideally increase the value of the property by more than they cost to build, thus creating equity in your home. One benefit of building an ADU is that the addition of another dwelling unit on your land will add value to your property in the form of equity.

Additionally, ADUs are also ideal rentals. Due to the shortage in housing that San Diego is experiencing, the rental market here is as strong as ever, as listings often get filled on the same day their listed & before the last tenant even moves out! The prices here are strong compared to other large markets in the state and the typical cost to build allows for profit to be made by renting your ADU out at market rent rates or even below, if you’re looking to give a family member or friend a nice deal. Even if you’re not interested in the work that comes with retaining a long-term tenant, short-term rental platforms like AirB&b and VRBO offer you the ability to give someone a clean, private space to stay and from which to launch their adventures around the city you call home. Not to mention, the payout usually isn’t too bad either. Sites like AirDNA can help you see just how much you could be making in short-term rental income on the ADU you build on your property on both an average monthly and annual basis.

Financially, ADUs are a no-brainer and fit within many people’s financial goals. If you’re unsure of whether or not something like this would pencil out for you, give us a call and we can help you analyze the numbers to determine if the ROI is viable for you and your family.

However, if you’re still looking for reasons to build an ADU on your property, our last reason here is one of the more popular reasons on the list.

#3 Extra Space

One of the most common reasons additional structures have been built over the years is to help the home owner create extra space, which has been utilized in a myriad of ways.

Many of these structures, assuming they don’t have a permanent resident, allow the home owner to better accommodate guests. For example, if your family is coming to your home to visit and they would appreciate their own private space, with a kitchen and their own bathrooms, then ADUs are a fantastic idea. We’ve seen this concept be utilized plenty of times in the past and while the home owner doesn’t have guests in town, the short-term rental strategy can be utilized in tandem with this to help you cover the mortgage and pay for some of the nice finishes you splurged on for your guests.

Additionally, as shown in the picture above, another common use-case we see for the extra space created with ADUs is for a home office. Working from home is as relevant as its ever been and for those of us who live that life, I think we can all agree there are some things we’d like improved upon. For many, some privacy and a chance to clear their heads to hammer out some emails without the kids screaming or the dogs barking may help, and for those who are more creative or structure-based, having a specific place dedicated to honing your craft can be of immense value.

A quick Summary

Whether you’re looking to add merely equity to your property, or you’re looking to add equity to your property and have the ability to generate rental income, provide your guests with a clean, private space, potentially bring your family closer and even further your professional career, you can’t go wrong with building an ADU. If you’re interested in working with an experienced Design & Build team that can help you design the perfect space with your styles, financial goals and dreams in mind, please don’t hesitate to give us a call today at (760) 749-0101 or submit a form on our contact page here or click the button below.