Is an Accessory Dwelling Unit Right for You? Here’s What To Know

Is an Accessory Dwelling Unit Right for You? Here’s What To Know

Struggling to find a home within your budget? Or do you own a home but need extra income or space for aging family members? Accessory dwelling units (ADUs) might be the perfect solution in today’s market.

What Is an ADU?

Fannie Mae defines an ADU as a small, self-contained living space on the same lot as a single-family home. It must have its own living, sleeping, cooking, and bathroom areas separate from the main house. ADUs can take different forms, and Fannie Mae states they can be:

• Within a main home, such as a basement apartment
• Attached to a main home, such as a living area over a garage
• Detached from the home entirely; it could even be a manufactured home

The Benefits of ADUs

ADUs are becoming increasingly popular as more people recognize their practicality. In fact, a recent survey found that 24% of agents say an ADU—such as a mother-in-law suite—is one of the most sought-after features among today’s buyers.

The increasing popularity is understandable. With rising expenses, an ADU can provide extra income and reduce financial pressure. Whether you purchase a home with one or build your own, it allows you to rent out that space to help cover your mortgage.  

Here are some key benefits of ADUs, as noted by Freddie Mac and the AARP:

• Living Close, But Still Separate: You get the best of both worlds — more quality time together, plus privacy when you want it. If that sounds like a win, it might be worth looking for a home with an ADU or adding one to your home.
• Aging in Place: Similarly, ADUs allow older people to be close to loved ones who can help them if they need it as they age. It’s a sweet spot that offers independence and support from loved ones. For example, if your parents are getting older and you want them nearby, this could be a great option for you.
• Built-In Childcare: If your family’s living in the ADU, you may be able to use them for childcare, which can also be a big cost savings. Plus, it gives your kids more time with their grandparents.

Since an ADU is a secondary dwelling on a single-family lot, it typically cannot be sold separately from the main home. While some states are changing this, regulations vary by location. Connect with a local real estate expert for the latest guidance.

Bottom Line

In today’s market, purchasing a home with an ADU or adding one to your property could be a smart move. Consult a real estate agent to understand local regulations and available options.

What’s your reason for considering an ADU?