Transforming Spaces: The Rising Trend of ADUs and How Renovations Can Maximize Their Value

ADUs are one of the hottest trends of the 2020s, allowing property owners to build more value onto their land in no time. This extra building can be anything from a mother-in-law suite to an in-home office that's in the backyard, but it can change everything for the property's value.
 
These are some tips on how to make these more valuable and why they're so heavily sought after.

1. Renovating to Rent

Renting out your ADU is one of the top reasons people build these structures. The additional monthly income is enough to make most people scramble to start building. This renovation will change in intensity based on what your property already offers and what the local laws are for a rental space.
 
At the very least, you'll want to offer a private entrance to this part of the property, with a well-lit path and good parking. With the cost of housing in San Francisco, this is a great way to make life easier for yourself and the renter.

2. Renovating to Sell With Your Home

If you want to sell your home and aren't sure what to do with the ADU, the general rule is to upgrade it the same way you'd upgrade the main building on your property. This can include simple deep cleaning but should also include minor remodels.
 
Check the heating and cooling system, and have this area inspected along with the rest of the home before you start updating.

3. Understanding the Importance of These Spaces

Whether you decide to update this and your home to make them energy-efficient buildings or you're at a loss of what to do with this building on your land, these spaces are an incredible thing to have. Not only do they add at least 10% of your home's value back into it, but they also give you a simple space to invite guests to stay.
 
ADUs can also be useful if you have an older child who's leaving for college or coming back from it and desperately needs their own space. This can help their transition into adulthood go far smoother.

4. Simple Mistakes to Avoid

There are some major mistakes that you need to avoid when creating or updating an ADU. The biggest mistake is shorting the safety required for these buildings. These need just as much insulation, air filtration, and safe water as the main home. 
 
Another issue is spending too much to update or build these. Don't spend more than ten percent of your home's value on this area of the property. Although it's exciting to think about updating and making it luxurious and fun, it's not worth wasting money.

5. Best Layouts For These Spaces

Open layouts are generally the most popular choice for these small buildings. From rustic metal siding to the screws on the cabinetry, every detail needs to be carefully planned as you would on an RV or classic 'tiny home.'  

Remember to get in as much natural light as you can. This can allow the spaces to feel larger and more welcoming instead of claustrophobic. Putting work into sound absorbing art to block out unwanted noise can also be helpful.

6. Important Things to Include

The most important things to include in any ADU are ample storage space, a C02 detector, a smoke detector, and an easy connection to the things that make the main home so nice. This generally means electricity, air conditioning, internet, clean water, and everything else that's necessary for modern life.
 
If you're renting this space out, consider offering it furnished since you don't have to worry about furniture being dragged to and from this small building through your lawn.

7. How to Budget For This

An ADU can cost from 30,000 to 100,000 dollars to build, depending on the size, style, and local material costs. In San Francisco, the price will be even higher, but it's worth it. Renting this out could net you two to three thousand dollars a month. 
 
You can borrow against your home or refinance your mortgage, but how you pay for this is generally a case-by-case decision.

8. Greenery Can Create Unique Space

To make this piece of the property feel like it's in a world all its own, a great choice is to stop and plan out your greenery carefully. Using hardscaping, you can create a path that leads up to a small EIFs stucco ADU that you rent out. This can make the smaller building feel like it's a whole home on its own. 

Remember to avoid blocking windows and other ways that natural light can make its way into the ADU.

ADUs Are Incredible Tools For Income

Whether you're considering building an ADU or you're interested in upgrading one you already have, follow these tips to create a space that adds value to your home. Check out our Before & After examples for inspiration!

Author Bio

Max Shafer is a freelance writer that loves sharing his knowledge and expertise on real estate. He lives in Land O’ Lakes, Florida where he enjoys spending time with his wife and researching real estate trends in his free time. Max’s work as a freelance writer can be found on Building Product Advisor, a construction industry resource site.