Additional dwelling units are a common occurrence in cities like LA these days. They offer a wide variety of benefits to homeowners and the community at large. That is why we put together this quick guide to building an ADU in Los Angeles.
Types of ADUs
An ADU or additional dwelling unit is a secondary residential unit built on the same plot of land as a single-family lot. There are four main types of ADUs:
- Detached
- Attached
- Garage conversion
- Internal
Each has its own benefits and drawbacks that should be taken into consideration before construction.
Benefits of ADUs
There are many benefits to building an ADU. The main benefit many people take advantage of is the extra income that can be derived from renting the unit out. This extra income can be used to pay the ADU development costs off and then used to pay off your mortgage or put towards your next big expense like buying a car or putting in a pool.
ADUs can also be used for multi-generational housing to home your aging parents or financially struggling loved ones. It can also be great for kids who turn 18 and are not ready to take the full leap to freedom just yet but still want a taste of independence.
Another great benefit to ADUs is that if you do rent them out, they help to combat the growing housing crisis. Since they are so small, they offer an affordable option for struggling families to live in to keep them off the streets.
Finally, an ADU also helps increase the property value of your home if you are looking to sell it in the future.
ADU Costs And Financing
Detached ADUs are often the most expensive to build since they are being built from the ground up. Garage conversions are usually the most affordable unless the structure or foundation is not up to code. ADU projects are usually around $113,300.00-$138,250.00 for a 499 square foot, 1-bedroom, 1-bathroom unit.
You can finance your ADU by using your savings, with a cash-out refinance loan, a home equity loan, or with a renovation loan.