Accessory Dwelling Units (ADUs) can add significant value to a property in California. On average, an ADU can add about $470 per square foot to the value of a property, though this amount can vary widely across the state. For instance, some ADUs in San Carlos have added more than $500,000 to a property’s value, and in Berkeley, some ADUs have increased a property’s value by over $600,000.
The size of an ADU is a major factor influencing its value. A studio ADU will generally be worth less than a one-bedroom ADU. The average size of a new ADU in California is 615 square feet, which makes the average value of an ADU approximately $468,630. This value would increase if your ADU were larger, say closer to 1,000 square feet.
The type of ADU also impacts the value it adds to your property. Detached ADUs typically carry the most value as they are separate spaces with a natural sound barrier. In some cases, a detached ADU can increase your property’s value by as much as 30%. However, attached, garage, and basement ADUs can also bring substantial value to your home, as they can function as living or rental spaces.
The value of your property can affect the value of your ADU. For example, an ADU on a property worth $600,000 will have a higher value than an ADU on a property worth $375,000. The location of your property, such as its proximity to parks and shopping centers, can also increase the value of your ADU.
It’s important to note that building an ADU involves obtaining proper city and county permits, which can cost anywhere from six to nine percent of your construction costs, depending on the complexity of the ADU project, the size of the unit, and the value of the construction.
Renting out your ADU can increase its return on investment and the amount of income generated from your property. For instance, ADU owners in the San Francisco Bay Area charge their tenants a median rent of $2,200 per month. Some cities restrict new ADUs to longer than 30-day rentals, but you can rent out your unit as a vacation rental. In San Francisco, ADU owners are renting their units to Airbnb users for an average of $191 per night.
However, the added value can vary depending on the specifics of the property and the ADU. For instance, a study conducted by Revival Homes, a Los Angeles-based firm, found that the typical ADU adds about 24% (around $250,000) to the sale price of a single-family home in L.A. County, with values ranging from 18% to 35% depending on the ADU’s size. Another appraiser based in San Gabriel found that ADUs typically add 10% to 20% to a property’s value, with the location of the property playing a significant role in the ADU’s worth. Therefore, it is advisable to consider the specifics of your property and local market conditions when estimating the value an ADU could add.
