So, you’ve got a plot of land and some big plans. You’re thinking about building an Accessory Dwelling Unit (ADU) first—maybe to live in while you build the main house, or perhaps to generate some rental income. It’s a creative approach, but can you actually do it? The answer isn’t straightforward. Whether you can build an ADU before the main house largely depends on local zoning laws, building codes, and how resourceful you can get with financing and planning. Let’s dive into the details.
The Reality Check: It Depends
The idea of building an ADU before the main house is appealing for several reasons. It gives you a place to stay during the construction of the main house, and if local laws allow, you might even start generating rental income right away. But before you start drawing up plans, let’s take a closer look at the obstacles and considerations.
Zoning Laws: Your First Hurdle
Zoning laws are your first major hurdle. In most areas, the ADU is meant to be a secondary unit—a bonus, not the main event. Local regulations typically require that a primary residence must be established before an ADU can be built. This is because the ADU is designed to be “accessory” to the main home, which means it can’t legally stand alone on the property.
However, exceptions exist. In some progressive cities or counties that are encouraging the development of affordable housing, there might be more flexibility. For instance, some places may allow you to build the ADU first, particularly if it’s intended as a temporary residence while the main house is under construction. This flexibility is often tied to specific conditions, such as having an approved plan for the main house and committing to its construction within a certain timeframe.
To determine what’s possible in your area, you’ll need to consult with your local planning department. Don’t just rely on hearsay or general advice—get the specifics directly from the source. Many city planning departments have online resources, but a face-to-face meeting or a phone call can give you more nuanced information.
Building Codes and Permits: The Nitty-Gritty Details
Even if zoning laws in your area give you the green light, you’ll still need to navigate building codes and permit requirements. These regulations are in place to ensure safety, proper use of land, and adherence to community standards. In many jurisdictions, building an ADU before the main house is complicated by the requirement that utility connections—such as water, electricity, and sewage—are often tied to the primary residence.
To build the ADU first, you’ll likely need to secure permits that allow for these utilities to be connected to the ADU independently. This might involve additional costs and complexities. For instance, some areas might require you to install temporary utility connections, which can then be integrated into the main house later. The specifics will vary depending on your location, so it’s crucial to understand the local building code requirements before moving forward.
Financing: The Money Talk
Financing an ADU first can be tricky. Most traditional lenders prefer to finance projects where the primary residence is the main focus. This is because the primary residence is typically more valuable and offers better security for the loan. Without that main house as collateral, securing a loan might be more challenging.
However, there are alternatives. Some lenders offer construction loans that can be used to build both the ADU and the main house. These loans are typically structured to release funds in stages as the construction progresses, ensuring that the project stays on track. Another option might be personal loans or tapping into savings. If your ADU is designed to be rented out, that potential rental income can also be factored into your financing strategy, helping to offset costs and provide additional leverage in securing a loan.
Make sure to explore all your options and consult with a financial advisor who has experience in real estate development. The right financing strategy can make the difference between a successful project and one that’s constantly struggling for funding.
Why Build an ADU First?
Despite the hurdles, there are several compelling reasons to start with an ADU:
- Live on-Site: If you plan to be hands-on with the construction of the main house, living in the ADU allows you to be present on-site. This can save you money on rent elsewhere and give you direct oversight of the construction process.
- Income Generation: If local regulations allow, you could start renting out the ADU even before the main house is completed. That rental income can be a valuable resource, helping to fund the ongoing construction and reduce financial strain.
- Flexibility: Building the ADU first gives you time to get a feel for the property and refine your plans for the main house. You might discover that certain features or layouts work better than you initially thought, allowing you to adjust your plans for the primary residence.
Final Considerations: The Bottom Line
Building an ADU before the main house is a strategic move that can offer significant benefits, but it’s not without its challenges. You’ll need to navigate a complex landscape of zoning laws, building codes, and financing options. The key is thorough preparation—know your local regulations, have a solid financial plan, and be ready to adapt as needed.
If you can manage these elements, building an ADU first could be a smart way to maximize the potential of your property, offering flexibility, income, and a head start on your long-term plans.
Additional Tips:
- Consult Local Experts: Whether it’s a real estate lawyer, a city planner, or a financial advisor, having experts on your side can help you navigate the complexities of this approach.
- Document Everything: Keep detailed records of all communications with local authorities, contractors, and lenders. This can be invaluable if any issues arise during the project.
- Plan for the Long Term: Consider how the ADU and main house will coexist on the property. Make sure that the ADU’s design and placement won’t interfere with the future construction of the main house.
By taking a strategic approach and planning ahead, you can turn the challenge of building an ADU first into an opportunity to create a flexible, functional, and financially savvy property development plan.