Accessory dwelling units (ADUs): A guide to what they are and how they can benefit you

Perhaps you're currently searching for a home but facing challenges in finding one that aligns with your budget. Alternatively, you might already own a home and are seeking additional income or accommodations for your loved ones. Whether you're a prospective homebuyer or a homeowner with evolving requirements, accessory dwelling units, abbreviated as ADUs, could potentially assist you in achieving your objectives.
What Is an ADU?
As AARP says:
“An ADU, or accessory dwelling unit, is a smaller home located on the same lot as a larger, main home.”
“An ADU is a separate, fully functional home with a kitchen, bathroom, and bedroom.”
"An ADU can be located inside, attached to, or detached from the primary residence. It can be created from an existing structure, such as a garage, or constructed from the ground up."
If you're wondering whether an ADU is a viable option for you, whether you're a potential homebuyer or a homeowner, here's some valuable information about the benefits ADUs can provide. Keep in mind that ADU regulations can vary depending on your location, so it's a good idea to consult with a local real estate expert for further details.
The Benefits of ADUs
Freddie Mac and the AARP identify some of the best features of ADUs for both buyers and homeowners:
Freddie Mac and the AARP have highlighted some of the key benefits of ADUs for both buyers and homeowners.
- ADUs allow loved ones to live close together but still have their own separate spaces. This makes it easy to enjoy each other's company and help each other out, while also having privacy when needed. If this appeals to you, you may want to consider buying a home with an ADU or adding one to your existing home. According to Freddie Mac:
"Adding an accessory dwelling unit (ADU) to an existing property is a popular way for homeowners to provide their family members with independent living space.”
- ADUs can also help older people age in place by allowing them to live close to loved ones who can provide assistance as needed. This gives them the independence they desire while also providing them with the support they need from their loved ones. For example, if your parents are getting older and you want them to be nearby, you could consider buying a home with an ADU or building one onto your existing home.
- ADUs are often smaller than standalone homes, making them more affordable to build. Additionally, building an ADU can increase the value of your property.
- You can generate rental income from your ADU to help pay your mortgage. However, in most states, ADUs cannot be sold separately from the primary residence. This is because they are considered secondary dwellings on single-family lots. However, some states are changing this law. Work with a professional to understand your options.
Here are some of the reasons why many people who have benefited from ADUs think they're a good idea, as Scott Wild, SVP of Consulting at John Burns Research, says:
ADUs have gone from being a small niche market to a much more significant part of new housing.
Bottom Line
ADUs offer many benefits to both buyers and homeowners. If you're interested, talk to a real estate professional who can help you understand the local codes and regulations for ADUs and what's available in your market.
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