What Is an ADU in Real Estate? 

ADU vs DADU: Key Differences

In studying ADUs vs DADUs (Detached Accessory Dwelling Units), what differentiates them is where they are situated:

• ADUs can be built onto a main dwelling or built in an existing building (for example, garage or basement conversion).

• DADUs are standalone buildings - think of a cozy backyard cottage or a small guest house.

Both ADUs and DADUs offer added living space with plenty of flexibility, but DADUs usually need a bit more room on your property and tend to cost more to build.

If you're weighing your options, think about how much space you have, your budget, and how separate you want the new living area to feel. DADUs are great if you're looking for a private space for guests or a rental unit. On the other hand, an ADU that's attached to your main home is often more budget-friendly and can be simpler to get permitted.

ADU vs Guest House: Are They the Same?

While both provide extra living space, there are key differences between ADUs vs guest houses:

• ADU meaning is that it is a legally independent house with a full bathroom and a kitchen.

• Guest houses may lack a full-fledged kitchen to restrict them to short-term use rather than permanent residence.

It is significant to zoning and rental considerations since ADUs can typically be rented on a long-term basis.

The difference really does matter, especially if you're thinking about renting out the space or using it as long-term housing. ADUs often fall under different building codes and permit rules compared to guest houses. In fact, in many cities, only ADUs can legally be rented out. 

What are the benefits of building an ADU?

• Increased Property Value. Studies show that ADUs can contribute to homes by up to 20-35% in value and are hence a wise investment for homeowners and speculators.

• Potential for Rental Income. ADUs offer a steady stream of passive income that can be used to cover mortgage expenses or generate supplemental cash flow. ADUs can yield a high return on investment in areas with a high demand for rentals.

• Multigenerational Living. ADUs provide independent living space for older parents, adult children, or extended family to remain near and yet still maintain privacy.

• Sustainable and Affordable Housing. ADUs are greener and more affordable than traditional housing developments and utilize existing land and infrastructure more efficiently.

• Flexible Use. An ADU can serve as a guest house, home office or creative space or short-term rental (if permitted by local ordinances).

ADU vs Addition: Which is the Better Option?

Homeowners often compare ADUs vs additions when looking to expand their living space. Here are the differences:

• ADUs are separate living areas with a bathroom and a kitchen and are ideal for rental income or multigenerational family use.

• Home additions expand the primary residence, providing extra rooms but not independent living quarters.

Just something to think about - ADUs give you a lot of flexibility down the road. You can rent them out for some extra cash, use them as a guest house, or turn one into your own little work-from-home spot. Plus, in a lot of California cities, the rules around ADUs are actually more relaxed, and they can bump up your property value more than a regular addition. So if you're thinking about the future, whether it’s making a smart investment or just keeping your options open - an ADU might be the better move.

Types of ADUs

ADUs come in various forms to suit different properties and budgets:

1. Detached ADU (DADU)

An independent structure located away from the main house, typically designed to function as a compact standalone residence.

• Provides maximum privacy.

• Requires additional space on the lot.

• Typically more expensive due to foundation and utility connections.

2. Attached ADU

Built as an extension of the existing house, sharing at least one wall with the main residence.

• More affordable than a detached ADU.

• Shares some utilities with the main house.

• Offers less privacy than a DADU.

3. Garage Conversion ADU

Transforms an existing garage into a livable space.

• Cost-effective by repurposing existing structures.

• Can be detached or attached.

• May require additional insulation and plumbing work.

4. Basement or Interior ADU

A unit created within the existing home, such as a finished basement or attic.

• Lower construction costs.

• Minimal impact on the property’s exterior.

• Potentially limited natural light and separate entrance challenges.

5. Over-the-Garage ADU

A living space built above an existing garage.

• Efficient use of space.

• Provides privacy while maximizing the property footprint.

• May require structural reinforcement of the garage.

Is an ADU Right for You?

Building an ADU is a strategic way to maximize your property’s potential, whether for personal use or investment. Before proceeding, check your city’s zoning laws and permit requirements.

Next Steps

• See if your property’s a good fit - Not sure what you’re allowed to build? We’ll walk you through local zoning rules and help you figure out what’s possible on your lot.

• Get a ballpark budget - Our easy-to-use ADU Cost Calculator gives you a clear, realistic idea of what your project might cost in just a few minutes.

• Chat with our team - Book a free consultation with ADU Pro. We’ll listen to your goals and put together a plan that makes the most of your space, budget, and vision.

Thinking about building an ADU? Visit ADU Pro to explore resources, cost estimates, and expert consultations.