Many homeowners in Los Angeles are now inquiring about the benefits of ADU construction when it comes to increasing their property value. You might be one of those people who wish to know the answer as well.
Does ADU Construction Increase Property Value?
This is one of the questions of so many who wish to embark on this journey. But the answer is a bit complicated. It’s tricky because how it increases property value will depend on the type of ADU you wish to construct. Here are the most common ADU types that are guaranteed to increase your property resale value.
Detached ADU
As the term suggests, this type of ADU is separate from your main home. When the project is completed, this ADU will become the most valuable. One of the reasons is that this type of ADU adds livable square footage to your property. Appraisers can use it to determine the value of your property. For instance, if the detached unit is 1,000 square feet, it means that it adds 1,000 square feet of livable space to your property.
How much does it cost? According to this Berkeley post, “the average ADU in our sample cost its owner approximately $156,000 to build — but also they tend to rent for below-market rates, whether rented to family and friends, or at arm’s length to strangers.”
Attached ADU
This is a type of dwelling unit that is added to your existing home. When it will be completed, it is the second most valuable AU. However, with this type of ADU, there’s less privacy compared to the detached type. However, appraisers will still utilize a cost-per-square-foot analysis to know the value of this unit.
It’s less valuable than detached because you can only increase the size of your home by 50%. Thus, if you have a 1,200-square-foot house, the maximum ADU that you can build is 600 square feet.
Garage Conversion
As the term suggests, it converts your garage into a granny flat. It will still significantly boost your property’s resale value. However, the increase will be less compared to detached and attached units. Unlike the other types of ADUs mentioned above, garage conversion granny flat is the least expensive. But because you’re going to convert the garage into a livable space, you won’t have a place to store your car. With that in mind, it may slightly decrease your property value.
Even though you’ll lose the use of your garage for its intended purpose, you can still earn money if you choose to rent it out. The payback for your investment in monthly income can be significant.
Is Your Property Ideal for ADUs?
Not all properties in Los Angeles are suitable for building ADUs. It’s crucial to consult with an expert first to find out if ADU construction is possible on your property. Call us today for more inquiries or get a free consultation: (818) 975-8323.
