Batch Data logo
left-dots

Product info

right-dots

NO SUBSCRIPTION FEES. SCALABLE PRICING.

Accessory Dwelling Unit (ADU) Definition

Accessory Dwelling Unit (ADU) Definition

An ADU (accessory dwelling unit) is a small addition that shares a primary home’s lot. It is also referred to as a carriage house, secondary dwelling unity, in-law unit, mother-in-law unit, or granny flat. It is essentially a secondary living space and can be detached (but built on the same lot) or attached (to a regular home).

An accessory dwelling unit is not an entirely new idea, nor is it restricted to building an additional space on free lot space. An older version of an ADU would be the apartments constructed over a garage. Some ADUs have a separate foundation, for instance, a small cottage commonly built in backyards. Living space in the basement can also be referred to as an ADU.

People construct accessory dwelling units for various reasons. But two of the most common reasons for building these secondary dwelling units include:

  1. Additional income through rent
  2. Housing for a relative

Some also use ADUs as guest houses. While ADUs are commonly utilized by the elderly, like the parents of the homeowner, some people also allocate them to their children to learn how to be independent. Many families also have an ADU so an unmarried family member can live there.

Is it possible to sell an ADU separately from the primary home?

Not generally. The law considers an accessory dwelling unit part of the primary dwelling. So, homeowners are tNot generally. The law considers an accessory dwelling unit part of the primary dwelling. So, homeowners are typically not allowed to sell an accessory dwelling unit if they are not selling the primary home. In some instances, homeowners can sell a detached accessory dwelling unit via a condominium agreement. However, it is uncommon and requires clearing certain legal obstacles. Naturally, this is something you cannot do at all if you have an attached dwelling unit.

Is building an Accessory Dwelling Unit worth it?

There is no straightforward answer since every accessory dwelling unit entails varying costs. Nevertheless, the cost of constructing an ADU is high even though it is typically cheaper to build it in a preexisting space, like an attic or a basement. The least expensive option is a garage conversion. 

Factors that impact ADU construction costs include surveying and permits, design & planning, construction, and related expenses. Considering all of that, an accessory dwelling unit can also increase your property’s value. A detached accessory dwelling unit, for instance, can increase your property’s value by more than 30 percent, depending on various factors, such as its location. Additionally, an accessory dwelling unit can generate additional income for the homeowner through rental. 

However, keep in mind that certain jurisdictions may reassess your property’s value after you build an ADU. You may have to deal with additional costs due to increased property tax.

Considerations

Some things you should consider before building an ADU include: 

Legal issues 

The first thing you should do is consult local zoning regulations and laws to determine whether building an accessory dwelling unit is legal or not. Building an ADU is costly, and your loan might not get approved if lenders see that constructing an ADU on the respective lot is not lawful.

Specific communities tend to have restrictions set by the HOA (homeowner’s association) or the property developer. These restrictions may include easements, building height, the number of dwelling units a single property can have, etc.

Utility Concerns

In many locations, an accessory dwelling unit isn’t considered a dwelling unit separate from the primary house. Therefore, it doesn’t require an individual service meter. So, the utilities of your ADU will be drawn from the existing connections at the main home. While you can get electricity and plumbing from the primary residence, you will require the approval of the health department to tap into its septic tank.

Dots

Enhance your Delivery Services with BatchData

BatchData is one of the nation’s leading providers of API access to the most accurate and complete residential, commercial and property intelligence plus up to date contact information. See how our fast, flexible APIs and products can integrate with your services to delight your customers. Check us out here, or drop us a line.

NO SUBSCRIPTION FEES.
SCALABLE PRICING.

Written by Austin Proctor 
Mail

NEWSLETTER

Subscribe to our weekly investment updates and stay tuned!