10 Key Benefits Of ADUs

Thinking about adding an Accessory Dwelling Unit (ADU) to your property?

Thousands of people are having the same thoughts, so let’s find out why they’re becoming so popular.

Table of Contents

What Is An ADU?

Before we dive into the ten major benefits of ADUs, it’s important to understand what they actually are, as they can often be confused for other types of buildings.

An Accessory Dwelling Unit (ADU) is a secondary housing unit located on the same property as a primary residence.

There are several types, including detached ADUs (DADUs), attached ADUs, junior ADUs, and more.

Now, let’s dive into 10 key benefits that ADUs can have.

Increased Property Value

ADUs can significantly boost your property value, up to 35% in some cases.

This increase in value stems from the added living space and potential rental income. Buyers are often willing to pay a premium for properties with versatile and income-generating additions.

Check out our article on ADU and property value for a deeper dive.

Rental Income

ADUs can provide a great source of rental income. Renting out your ADU can help offset mortgage costs and provide extra financial stability.

This steady stream of income is particularly beneficial in high-demand rental markets.

Some homeowners find that the rental income from an ADU can cover a significant portion of their mortgage payments, making homeownership more affordable.

Housing Flexibility

ADUs are super flexible, and can be used for most purposes like extra living space, home offices, and much more.

This flexibility is one of the main selling points of ADUs – you really can use them exactly how you want, from rental income generation to generational living space for your family.

Affordable Housing Solutions

A lot of people won’t really consider this one, but ADUs are great at providing affordable living space, especially in places where the demand for real estate is high and there isn’t much land available to develop.

By adding more housing units to existing neighborhoods, ADUs help increase the overall supply of affordable housing. This can be especially beneficial in cities with housing shortages, providing an affordable alternative for renters.

Although this benefit won’t be apparent right away, over time it can have a big impact on the local economy.

Sustainable Living

ADUs promote sustainable living.

Not only are they smaller than your typical house (meaning less energy usage and footprint), but they’re also typically constructed with energy efficiency in mind.

This means they often require solar power, as well as other strict energy requirements to make them as efficient as possible.

Multi-Generational Living

ADUs support multi-generational living. They allow families to stay close while maintaining privacy. This setup is perfect for families who want to care for elderly parents or accommodate grown children without sacrificing independence.

Multi-generational living can also strengthen family bonds and provide a supportive environment for all members.

Home Office Space

Working from home has never been more common than it is now, but this has brought a big problem of separating work life from home life.

Using an ADU for home office space directly addresses this problem, by providing a completely separate space for work.

Increased Density Without Sprawl

ADUs increase housing density without contributing to urban sprawl. They utilize existing infrastructure efficiently.

This approach helps cities manage growth sustainably by adding housing units within established neighborhoods, reducing the need for new developments that can encroach on natural spaces and agricultural land.

Tax Benefits

ADUs offer various tax benefits. You can often deduct expenses like maintenance, utilities, and insurance. If the ADU meets certain criteria, you might also qualify for property tax reductions or credits.

These financial incentives can make building and maintaining an ADU more affordable in the long run.

Learn more about the tax benefits of ADUs here.

Customizable Space

ADUs are highly customizable. You can design them to fit your specific needs and preferences. Whether you want a modern, sleek design or a cozy, traditional look, an ADU can be tailored to match your vision.

Customization options extend to the layout (use Presite to test different layouts), finishes, and amenities, ensuring the space is perfectly suited to your lifestyle.