Burgess General Contracting LLC.

Thinking About an ADU? Here’s What You Need to Know Before You Build

Accessory Dwelling Units (ADUs) are one of the smartest ways to add usable space and long-term value to your property. Whether you call it a casita, guest house, in-law suite, or backyard home, an ADU can turn underused yard space into something that actually works for your life.

In this post, we will walk through what an ADU is, why they have become so popular, how homeowners typically use them, and what the basic process looks like from idea to move-in.

What Is an ADU?

An Accessory Dwelling Unit (ADU) is a secondary, self-contained home on the same lot as your primary residence. It has its own:

• Entry

• Kitchen or kitchenette

• Bathroom

• Sleeping area

• Utilities (sometimes shared, sometimes separate)

ADUs come in several common formats:

• Detached ADU – A stand-alone structure in the backyard, often designed like a small home.

• Attached ADU – Built onto the existing house, sharing at least one wall.

• Garage conversion – Turning an existing garage into a livable unit.

• Over-garage ADU – Building a suite above a new or existing garage.

• Interior conversion – Converting a basement, loft, or portion of the main home into a separate unit with its own entrance.

Because ADUs are smaller and built on land you already own, they are typically more cost-effective than buying a second property or moving to a larger home.

Why ADUs Are Exploding in Popularity

Homeowners are turning to ADUs for a mix of financial, practical, and lifestyle reasons. Some of the most common:

1. Rental Income

One of the biggest draws is the potential for monthly rental income. A well-designed ADU can be rented out to:

• Long-term tenants (steady income)

• Traveling nurses, professionals, or students

• Family members who can contribute to housing costs

In many markets, ADU rent can significantly offset your mortgage, property taxes, or even act as a retirement income stream.

2. Multigenerational Living

Families are increasingly choosing to keep parents, adult children, or extended family close by—without everyone being under the same roof.

An ADU can be perfect for:

• Aging parents who need to be nearby but independent

• Adult children saving for their own home

• A family member with special needs who benefits from proximity and privacy

You get separation and privacy, but with the peace of mind that loved ones are only steps away.

3. Space That Adapts as Your Life Changes

An ADU is incredibly flexible over time. The same unit might serve as:

• A home office or studio now

• A rental unit in a few years

• A guest house for family or friends over the holidays

• A place for a caregiver or live-in help later in life

Instead of being locked into one use, your ADU can evolve with your needs.

4. Increasing Property Value

A professionally designed and permitted ADU generally increases the resale value of your property. Buyers see:

• Bonus living space

• Income potential

• Future flexibility for their own needs

While the exact value bump depends on your local market, an ADU is often viewed as a premium feature, not an extra shed in the backyard.

Common Ways Homeowners Use Their ADU

Every property and family is different, but here are some of the most popular use cases we see:

• Guest house / casita for visiting family and friends

• Long-term rental for steady monthly income

• Short-term or mid-term rental (where allowed by local rules)

• Home office or studio for remote work, content creation, or a quiet workspace

• Private suite for teenagers or adult children

• Caregiver or nanny quarters

• Retirement “downsize”: live in the ADU and rent out the main home

A good design process looks at not just what you need now, but what you might need 5–10 years from now.

What Does the ADU Process Look Like?

While the exact steps vary by city and jurisdiction, the overall path usually looks like this:

1. Site Evaluation & Feasibility

First, a contractor or designer will look at:

• Lot size and layout

• Setbacks (how far from property lines and other structures you must build)

• Utility access (electric, water, sewer)

• Easements or drainage paths

• Any HOA restrictions

This step determines what size and type of ADU is realistic on your property and helps avoid surprises later.

2. Concept Design & Floor Plan

Next, you work through:

• Overall size (e.g., 400 sq ft studio vs 800 sq ft 1-bedroom)

• Layout of kitchen, bathroom, bedroom, and living space

• Window and door locations for light, privacy, and views

• Storage solutions (critical in small spaces)

• Exterior look so the ADU complements your main home

A strong design balances comfort, functionality, and budget.

3. Budgeting & Financing

Once a concept is in place, your builder can put together a more accurate budget range based on:

• Square footage

• Level of finishes (standard vs upgraded)

• Site conditions (flat lot vs. grading, trenching distance for utilities, etc.)

• Foundation type and structural needs

Homeowners typically finance ADUs through:

• Cash or savings

• Home equity line of credit (HELOC)

• Cash-out refinance

• Construction loan

• In some areas, special ADU financing programs

The important piece is to understand total project cost and how it compares to your potential rental income or added property value.

4. Plans, Engineering, and Permits

To build legally, you will need:

• Construction drawings (architectural plans)

• Structural engineering (if required)

• Title 24/energy compliance (in many states)

• Permit submittal to your city or county

A good contractor or design-build team will handle most of this for you, coordinating with designers, engineers, and the building department.

5. Construction

Once permits are approved, construction usually moves through these stages:

1. Site work, grading, and utilities

2. Foundation

3. Framing and roof

4. Rough-in electrical, plumbing, HVAC

5. Insulation and drywall

6. Interior finishes (flooring, cabinets, tile, paint)

7. Final fixtures, trim, and punch-list items

8. Inspections and final sign-off

Throughout construction, clear communication and scheduling are key to keeping the project on track and minimizing disruption to your daily life.

Key Things to Consider Before You Commit

Before you move forward with an ADU, it is wise to think through:

• Local zoning and HOA rules

  
  

  • Are ADUs allowed on your lot?

  • Are there restrictions on size, height, or occupancy?

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• Parking requirements

  
  

  • Some areas require additional parking spaces for an ADU.

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• Utility capacity

  
  

  • Does your existing electrical panel, water service, and sewer line support another unit, or will they need upgrades?

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• Access and privacy

  
  

  • How will occupants access the ADU?

  • How will you maintain privacy between the main home and ADU?

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• Long-term plan

  
  

  • Is this primarily a rental, family space, or something else—and how might that change?

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Getting clear on these items early helps prevent costly changes later.

Is an ADU Right for You?

An ADU can be a powerful tool:

• To generate rental income

• To support family without sacrificing privacy

• To future-proof your home for changing needs

• To increase the overall value and usability of your property

If you have underused yard space and are thinking about building up your property instead of moving, an ADU is worth serious consideration.