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PLANNING, PAYING FOR AN ADU Most new homes are built by developers, entire subdivisions at a time. Apartments are also built by pros. The vast majority of ADUs are created by homeowners..
An ADU may present the ultimate chance for a do-it-yourselfer to build his or her small dream home. More often, homeowners bring in a combination of architects, designers and construction
contractors to do the work, much as they would for a home addition or major kitchen remodeling. The local municipality’s planning department can provide guidance on the rules for ADUs and
information about what permits, utility connections and fees are involved. ADUs aren’t cheap, and they are often the most significant home improvement project a homeowner will undertake.
Although internal ADUs can be built for about $50,000, new detached ADUs often exceed $150,000. Most ADUs are financed through some combination of savings, second mortgages, home equity
lines of credit and/or funds from family members (perhaps a relative who ends up living in it). In some areas, the cost of building an ADU can be recouped after a few years of renting it. If
that’s the plan, it’s worth estimating the expenses versus the potential income before undertaking an ADU project. A few cities, nonprofits and start-ups are experimenting with creative
financing options that could put ADUs within reach for more homeowners and their families, as well as prospective renters.
