ADU 101: Everything You Need to Know Before You Build

Accessory Dwelling Units (ADUs) are one of the fastest-growing housing solutions for homeowners looking to add value, create rental income, or accommodate family. But building one is a big decision—and requires planning, budgeting, and a solid understanding of local rules.

This guide breaks down everything you need to know to get started with confidence.

🧱 What Is an ADU?

An Accessory Dwelling Unit (ADU) is a self-contained home located on the same lot as a primary residence. It includes a kitchen, bathroom, living space, and sleeping area. Common types include:

• Detached ADU – A separate structure in your backyard
• Attached ADU – Built onto the main home, like an addition
• Garage Conversion – Converts existing garage space
• Basement Conversion – Converts part of your existing home
• Junior ADU (JADU) – Up to 500 sq ft, within the main home (often with a shared bathroom)

🔍 Step 1: What’s Your Goal?

Start by asking why you want to build an ADU. Your answer will shape your budget, design, and permitting strategy.

• Need rental income? Go with a detached or garage unit with max privacy.
• Want to house family or caregivers? Consider attached or JADUs.
• Looking to increase property value? A well-designed ADU can boost resale and appeal.

🧭 Step 2: Are You Eligible?

Before dreaming up floor plans, determine if your lot and zoning allow ADUs. Key questions:

• Is your lot zoned for single-family or multi-family?
• Do you meet setback and lot coverage requirements?
• Do you have enough space for parking or utility connections?

Pro Tip: Use your city’s ADU ordinance or a local zoning consultant to save time. Some platforms automate this check for you.

💸 Step 3: Know the Costs

ADU costs vary widely based on location, size, and type:

ADU TypeBudget RangeDetached$150K–$400K+Attached$100K–$250KGarage Conversion$80K–$180KJADU/Basement$40K–$120K

Additional Costs to Expect:

• Architecture/design fees
• City permits and impact fees
• Utility hookups (sewer, water, electricity)
• Site work (grading, foundation)

🛠 Step 4: Permits & Planning

You’ll need to:

1. Submit building plans to your city
2. Pass plan check for zoning, safety, and code
3. Get construction permits
4. Schedule inspections throughout the build

Pro Tip: Some cities offer “pre-approved ADU plans” to fast-track your build.

🏗 Step 5: Build Your ADU Team

Your dream ADU won’t build itself. You’ll need:

• Architect or Designer – For plans, 3D models, and code compliance
• General Contractor or ADU Builder – For construction and permits
• Engineer – If you're modifying structure or utilities
• Permit Specialist (optional) – Speeds up city approvals

Many prefab ADU companies offer full-service packages with all of the above included.

🗓 Step 6: Timeline Expectations

ADUs don’t happen overnight. Here’s a rough estimate:

PhaseTime RequiredResearch & Planning1–2 monthsDesign & Permitting2–4 monthsConstruction4–9 months

💰 Step 7: Think Long-Term ROI

A well-executed ADU can generate:

• $1,500–$3,500/month in rental income (location dependent)
• $100K+ in property value
• Tax benefits from depreciation or interest deductions (talk to your CPA)

Also, ADUs can support:

• Aging in place
• Passive income in retirement
• Space for remote work or a small business

🧾 Optional: Financing Your ADU

Popular ADU financing options:

• HELOC (Home Equity Line of Credit)
• Cash-out Refinance
• Construction Loans
• Government grants/incentives (in cities like LA, Portland, Oakland)

Some lenders now offer ADU-specific loans based on projected rental income.

📥 Free Download: ADU 101 Checklist

Want to keep this handy? Download our 1-page ADU 101 Starter Checklist for a quick reference covering:

• Lot eligibility
• Budgeting worksheet
• Permitting checklist
• Timeline roadmap

👉 Download the ADU 101 Checklist PDF

Final Thoughts

Building an ADU is an exciting opportunity—but it’s also a big investment. With the right information and partners, you can create a legal, livable, and profitable space that adds long-term value to your property.

Coming next in this series:
➡️ What Type of ADU Is Right for You?
➡️ How Much Does It Cost to Build an ADU in Your Area?

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