How Adding an ADU Can Be a Profitable Move

Adding a second living space to your home and property can do more than generate rental income. You may also increase your home's total value by up to 35%.

Although the official name for a separate space is Accessory Dwelling Unit or ADU, they're often called garage apartments, carriage houses, or secondary suites.

While an ADU can be rented out, it can also serve as accommodation for an aging parent who prefers privacy. You can opt to keep it vacant for weekend guests or use it as an office, workshop, or studio. Another option: plan to exchange your main home with an adult child upon retirement while you move into the ADU. Aging in place was never so easy!

Here are some common examples of urban and suburban ADUs:

  • A studio apartment, aka "bedsitter", over a detached garage

  • A suite located above a home's main floor

  • A converted basement with a separate entrance

  • A 100% detached structure, such as a backyard cottage

Before you begin planning an ADU, you'll need to check your local government's website for a link to zoning codes to your area or contact your local municipal planning or building code office.​

Government Grant: How to get $40K on your Next Construction Project!

Are you considering adding an accessory dwelling unit (ADU) to your property? Good news! The government is offering a $40,000 grant that can significantly offset the costs associated with constructing an ADU. This grant program aims to promote affordable housing options and provide financial assistance to homeowners.

The ADU Grant Program, administered by CalHFA (California Housing Finance Agency), offers up to $40,000 in funding towards pre-development and non-reoccurring closing costs related to the construction of an ADU.

This means that you can receive financial assistance to cover expenses such as architectural design, engineering, permit fees, and other preliminary costs.

By taking advantage of this grant, homeowners have the opportunity to create a separate living space on their property, which can serve as a rental unit, a home office, or even accommodate multigenerational living arrangements. In addition to the potential rental income, the presence of an ADU can increase the overall value of your property by up to 35%.

It's important to note that the ADU Grant Program functions as a reimbursement credited towards your renovation loan. This means that eligible homeowners who are approved for the grant will receive the funds as a reimbursement towards the renovation loan of the entire ADU project

So, it's crucial to explore financing options and consult with professionals to ensure a smooth and seamless process.

The availability of this grant highlights the government's commitment to supporting the construction of ADUs and addressing the housing shortage issue. ADUs, also known as garage apartments, carriage houses, or secondary suites, provide a flexible housing solution that can adapt to changing needs and lifestyles. They offer additional housing options while making efficient use of existing residential properties.

Furthermore, various state and local governments across the United States are implementing similar programs to encourage the construction of ADUs. For instance, the Plus One ADU Program provides grants in New York State to create and improve ADUs.

By utilizing the government grant, you can transform your property into a valuable and versatile asset. Whether you choose to use the ADU as a rental unit, a private retreat, or provide housing for extended family members, the possibilities are endless.

Don't miss out on this opportunity to secure financial assistance and unlock the potential of your property with an auxiliary dwelling unit.

Remember, time is of the essence! Start your planning process early, gather the necessary documents, and consult with professionals who can guide you through the entire journey.

With the $40,000 grant, you'll be one step closer to creating a functional, comfortable, and valuable addition to your property.

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Melina Rissone

Having sold properties for more than 17 years and earning various prestigious awards throughout the course of her career, Melina Rissone has more than earned her reputation as one of San Diego's most skilled and trustworthy real estate brokers.

  • Coldwell Banker Global Luxury and Institute of Luxury Home Marketing certified.
  • Cartus Network Inventory Specialist and Cartus Network Marketing Specialist since 2015.
  • RCS-D Designation, a Real Estate Collaboration Specialist for Divorce.
  • SRES Certification through NAR is a Seniors Real Estate Specialist certification.
  • Melina is bilingual in English and German.
  • Recognized as the Top 4% of all real estate brokers in San Diego County in 2021 and the Top 3% of Coldwell Banker International.
  • Coldwell Banker Presidents Elite Award.