Whether an occasion to celebrate or distressing news, families always stay together. When there’s a financial issue or a loved one is in need of special needs, families unite and provide all that is possible. One such special need happens to be housing. With the increase in population and the requirement of a place to live in, the prices of properties have skyrocketed. Moreover, there also can be a limited chance to invest in a property that perfectly suits the requirement of an individual or family.
In such a case, accessory dwelling units can prove to be a major benefit. This has become a popular housing option in many countries across the United States. In simple terms, it acts as an additional living space for independent or couple dwelling. What’s even better is they are fully functional and come with their own kitchen, bathroom, storage space, and more. ADUs are known by other names as well including family unit, accessory apartment, backyard cottage, live-in garage, granny cottage, and attic apartment.
What is an ADU or Accessory Dwelling Unit?
The legal and regulatory term for a secondary house or apartment that is located on the same building lot as a primary residence is known as an accessory dwelling unit, or ADU for short. Although the unit cannot be bought or sold separately, it is frequently rented out to generate additional income or provide housing for a family member. For instance, an elderly parent might be able to avoid moving into an assisted living facility by relocating to a smaller unit within the same building.
How Much Does an Accessory Dwelling Unit Cost?
The price of constructing an accessory dwelling unit (ADU) is determined in large part by the design of the structure; for instance, whether it will be detached from or attached to the primary residence, as well as which materials and contractors will be required. Adding an accessory dwelling unit (ADU) to a property almost certainly increases the homeowner’s annual tax obligation, which may result in the loss of a sizeable portion of the rental income the property generates.
How to Financially Construct an Accessory Dwelling Unit?
The owner’s unique financial circumstances will determine which method of financing an Accessory Dwelling Unit (ADU) is the most beneficial. The homeowner also has the option of refinancing their mortgage if they have equity in their home, taking out a loan specifically for home improvements, or simply using cash on hand.
Some accessory dwelling units (ADUs) come in prefabricated models, and the manufacturer of these models can frequently assist with financing. Because of the rise in popularity of Accessory Dwelling Units (ADUs), there are now even lenders who specialize in financing ADUs. It is important to keep in mind that the interest rates associated with these options are more likely to be higher than those associated with conventional mortgages. As a result, it is possible that refinancing your primary mortgage will continue to be the option that results in the lowest cost.
Building an accessory dwelling unit (ADU) could increase a homeowner’s overall tax burden, which could eat away at a sizeable portion of the profit. The housing and rental market is highly variable on a city-by-city and state-by-state basis. Prospective landlords should get in touch with real estate agents or conduct their research by looking at rental listings and determining what the going rate for rentals is in their immediate area. After they have determined the likely overall annual income from their ADU, they can then consult with a tax professional to determine whether or not purchasing an ADU would be a beneficial investment for them given their current financial situation.
Understanding the Concept of Accessory Dwelling Units
An accessory dwelling unit (ADU) is also known as a mother-in-law or in-law unit, secondary dwelling unit, or carriage house. A typical ADU will feature a kitchen, living area, and separate entrance all of its own. An accessory dwelling unit (ADU) can be built as a stand-alone unit, attached to an existing home or garage, or it can be built in any other configuration; however, it will typically utilize the water and energy connections of the primary residence.
Following the boom in real estate that occurred after World War II, most residential areas in the United States were zoned to place restrictions not only on the population density but also on the size and distance between single-family homes.
In recent years, zoning regulations have been relaxed in an increasing number of communities across the United States to make it possible to build accessory dwelling units (ADUs). These zoning laws, in general, impose restrictions on the size and design of any newly constructed units and mandate that the property’s owner resides there.
Benefits of Investing in an ADU by Families
As mentioned above, accessory dwelling units are basically additional living spaces that are fully equipped with necessary amenities. They are primarily categorized into three types: Detached, Attached, and Garage Conversion. You can learn more about the concept and benefits of this form of the housing unit by clicking on the provided link. Based on the requirement by a family, they can use the ADU for various purposes. We have listed out five major benefits that families can avail when investing in an ADU:
1. Space for the Elderly
Assisted living for the elderly is a popular practice today, but they’re also are many who do not prefer the same. In such a scenario, ADU works as the perfect opportunity. They can live independently in the well-equipped living space while being able to get the support of their family members when necessary.
2. Earn Extra from Rents
Renting out properties is an amazing way to earn extra bucks that work wonders. With an accessory dwelling unit, a family need not invest in buying an all-new property in the market. In fact, because this is built within the available property, one can save the extra money that goes into buying land or for brokerage. The ADU can be built as per one’s budget and needs, which can further be rented.
3. Office Space
Families who have or are starting a new business can avail much with an accessory dwelling unit. They can use the entire space for business activities while keeping the main home strictly for personal activities. This also gives an opportunity to segregate the two important worlds along with their respective belongings.
4. Guest House
The fourth benefit to avail from an ADU is to turn the space into a guest house or guest room. Many times, especially during occasions, extended family members are not able to live together due to less space. With such a living space available, guests can live as per their comfort. This also helps to not disrupt the daily routine of the family throughout their stay.
5. Leisure Space
Sometimes, planning a get-together with friends and colleagues can be difficult with family members around. So, to avoid those awkward situations, you can invest in an ADU. Right from cooking for the party to spending hours chatting and drinking, everything can be done under a single roof. This also helps maintain the required distance from children and elderly people of the family.
If you think about it, these accessory dwelling units actually are the perfect solutions for a family. If there is any space such as the backyard or an empty garage, it is high time that you put them into use. This also acts as an ideal way to improve your lifestyle and enhance the property’s value. With a fully functioning ADU built in your property, you can be assured of being the owner of a pretty good valued real estate.
Does Having an ADU Increase the Value of Your Home?
A common reason for their popularity is the value increase that an ADU can bring to a piece of real estate. However, the amount of value that they add is difficult to calculate because it is dependent on the market. It’s possible that a property owner won’t know whether or not an Accessory Dwelling Unit (ADU) is a good investment until after they’ve sold the property.
On the other hand, an Accessory Dwelling Unit adds value in other ways that ought to be considered. A senior member of the family who resides in an accessory dwelling unit (ADU) may place a high premium on the option to continue living in their own home rather than moving into an assisted living facility. Alternately, a younger member of the family might value the opportunity to reside at home until they are better able to support themselves financially.
Facts about Accessory Dwelling Units
- A recent report from the State of Oregon Department of Environmental Quality claims that compared to typical single-family homes, accessory dwelling units can reduce carbon dioxide emissions by up to 40%. Some people worry that ADUs will cause heat islands in already densely populated areas, even though that ADUs use less of the Earth’s resources to build and power than normal-sized homes. Even though this might be a valid concern, research indicates that 700 square foot Accessory Dwelling Units will still have a 50% lower impact on climate change than a typical home. Because they are built on already developed land, modern ADUs are also better for the environment. Lessening the destruction of Earth’s natural resources is always beneficial.
- The majority of ADUs are elegantly built and furnished with contemporary conveniences. ADUs can add a contemporary touch to your home while giving you extra space and a different source of income. They are ideal for home offices, live-in visitors, and monthly rentals.
- There is no proof that ADUs contribute to parking issues.
- Residents of ADUs pay taxes to support neighborhood amenities like parks, roads, and schools.
- A significant number of ADU contractors construct their own ADU homes in separate locations. Because of this, there will be no construction noise and neighbors won’t get frustrated.
To build an accessory dwelling unit, it is also necessary to hire the experts of the industry. These small units come fully equipped with amenities and hence, professional guidance is of utmost importance. You can come across ADU experts for your area through the internet. In addition to this, it is also suggested that you get in touch with customers who have received the services. This will allow you to have a better idea about investing in the same and the service providers of your area.