What might look like a typical one-car garage is becoming part of a growing housing trend, as buyers get creative and transform these spaces into accessory dwelling units to make extra cash.
ADUs — or granny flats — are completely independent living units built on the same property as a single-family home.
Across the country, the number of ADU permits has grown dramatically over the past decade. In 2016, there were just under 5,000 permits issued per year. Now that number has grown to more than 61,000 per year, according to the Pew Research Center.
Brian Koons, buyer and developer for Byld Partners, said buyers have two options: find a home that already has an existing ADU, or build one on their land — taking into account the cost of permitting, construction, and materials.
"How much would something like this cost to create an ADU? You're typically going to range anywhere from an all-in cost of like 350 to 600 a square foot, depending on if you are DIYing things. Depends on if you need things like a water line upgrade, which alone can cost like 50,000 to 70,000 dollars," Koons said.
According to SD Cash Buyer.com, depending on the unit's size and location, ADUs are rented out between $1,200 and $4,000 a month. Experts say an ADU also adds anywhere from $100,000 to $300,000 to a home's equity.
Mike Blair, owner of the Mike Blair Realty Group, said he's seen an increase in interest for homes with ADUs. He said many are multi-generational families moving onto the same property to split expenses.
"Even if they're bringing in their parents, for example, that live in the ADU, that does help supplement the house and mortgage that they currently have," Blair said.
Some renters are also finding better deals moving into an ADU.
"You can rent a normal 3 bedroom, 2 bathroom house, or you can rent an ADU; let's say they're the same specs. The adu is probably going to be newer, have better technology, better upgrades, better lighting, better ac, and so at the same rate as the old house. There's a great opportunity to rent an ADU," Blair said.
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