Construction costs for your ADU will vary significantly depending on personal preferences, site conditions, location, and many other factors.

Size: Despite what many think, smaller ADUs may cost almost the same as larger ones. Many costs like foundation, kitchen and bathroom work only increase slightly for larger ADUs. Kitchen costs will range from $25,000–$50,000 with each bathroom ranging from $15,000–$25,000.

Type: New construction, both detached and attached, tend to be the most expensive. Garage conversions are not much cheaper than new construction if at all. Conversions of interior space (basement or otherwise) are often the cheapest.

Other factors:

• Quality of interior finish work and amenities
• Architectural form and details
• Extent of utility, structural, mechanical, electrical, and plumbing upgrades required
• Required site upgrades (sidewalks, sewer and water)
• Whether sprinklers are required
• Whether doors and windows meet emergency exit standards
• Lot complexity (slope, trees, fault lines, etc.)

Rental income is a major benefit of having an ADU or JADU on your property – for many people, it provides flexibility in their budget or an opportunity to grow their savings. Remember you can’t do short-term rentals with your ADU.

Make sure to consider potential income when planning the finances for your project.

Adding an ADU will likely affect your property taxes and the resale value of your home. However, your primary house will not be reassessed, and your property taxes will only increase based on the added value of your ADU. For example, if you build an ADU that adds $150,000 to your property value, and your tax rate is 1%, your taxes will increase by 1% x $150,000, or $1,500 per year.

Building a JADU will have a significantly smaller impact on assessed value. In some cases, your taxes will not increase at all. Home sharing will also not increase the assessed value of your home. Generally, garage conversions will not raise your tax bill as much as new construction, but they will also not add as much value.

Each property will require a one-on-one analysis to determine the added value of an ADU, so contact the County Assessor & Recorder’s Office once you have an idea of your plan. They will be able to provide you with a rough estimate of tax implications.

Adding an ADU may impact your income taxes as well. This can be rather complicated, and it’s best to discuss these with a tax advisor.

If you have equity in your home, a cash-out refinance or home equity loan/line of credit (HELOC) might work for you. Financing is typically unavailable for homeowners with lower income and insufficient home equity, but the California Housing Finance Agency (Cal HFA) ADU Program has grants available of up to $40,000 to qualified homeowners – check their website for the most up-to-date information.

Many homeowners use a mix of options to finance their ADU, including savings, funds from family, and/or loans. It is strongly recommended that your financing is in place before construction starts. Be sure to factor in potential rental income since that will help you repay loans. See Casita Coalition’s ADU Finance Guide for Homeowners for more details on financing options and our Worksheets for questions to help you decide a financing strategy.

In general, it is helpful to avoid having a fixed budget total in your head as you explore your options.The cost to build an ADU typically ranges from $30,000 for a simple interior conversion JADU, to $400,000+ for a large detached ADU with high-end finishes on a hillside lot. Cost per square foot is a good way to estimate, though this too can range — a very rough placeholder for you to use is $300 per square foot for construction (“hard costs”) and design and fees (“soft costs”), depending on your design and the materials you chose.