ADU Trends to Know

By Andrew Manning

Accessory Dwelling Units (ADUs) are gaining popularity absolutely everywhere but in urban and condensed neighborhoods, you’re likely to see ADUs in older homes. Usually, owners will convert garage space into a legal, permitted second unit on the property. 

Converted garage-style ADUs are fairly easy to construct, which makes sense because there’s no real construction to complete. The structure is already there – no need to build anything – and it’s only a matter of running electrical lines and getting the space up to code so it can be rented out or used by the owners. Remember: A legal ADU requires a separate legal address from the city and is separately metered for utilities. 

In my market area, converted-garage ADUs are popular in Sherman Oaks, Valley Village, Studio City, Encino, Tarzana and Woodland Hills. 

With ADUs all the rage around town, new construction is hopping on the trend, and we’re seeing more new construction homes purposefully built with ADUs. Of course, this isn’t possible if, let’s say, you’re building in a gated community with a homeowner’s association that won’t allow for ADUs, but as long as the community and city allows it, your new home can have an ADU. 

And if you’re reading this thinking, “Andrew, I’m just going to upgrade a few appliances in my pool house and rent it out to my aunt’s cousin’s best friend for the summer.” A word to the wise: Don’t do it. 

All it takes is one neighbor complaining about the secret pool house “rental” on your property and the next thing you know you’re pulling out the stove in your tiny marble kitchen on a particularly sunny Sunday afternoon. 

When it comes to ADUs, the rules and regulations in your city dictate exactly what you can and can’t do. For instance, if the structure on your property isn’t a legal ADU, you can only have a half bath and no shower. You can’t have a full kitchen but you can have a sink and a dishwasher but you can’t have a sink, dishwasher and stove. Phew! Tired yet?

If you’re simply upgrading extra detached space on your property, you can call it a bonus room, you can hand-paint “Rec Center” on the accent wall, you can even have a half bath and a partial kitchen but if you want to make it a legal rental, you have to have separate heating, air conditioning, electric, a separate address and all the stipulations the city requires for a permitted ADU. 

Once your permitted ADU is fully equipped, it’s a fantastic feature for release. Expect to get anywhere from a 100% to 150% return on your investment, keeping in mind these ADUs can cost upwards of $60,000 to $100,000 if you’re building one from scratch or updating it with luxurious amenities. 

OK, you’re convinced. You thoroughly read this post and this post and now, you’d like to explore all the possibilities of adding an ADU to your property. 

What’s next? 

Well first, you can book a complimentary real estate consultation with me to talk about resale value, best practices, marketing a home with an ADU and all that jazz, then you can explore the brand-new ADU Construction Experts website from Development House. As fortuitous blog post timing would have it, the development company just contacted me this week about a new branch they launched that’s dedicated to building and/or converting spaces into ADUs. Talk about good timing! Check out the ADU Construction Experts website here!