Could an ADU be your next smart investment?
As housing dynamics shift across Washington State and beyond, accessory dwelling units (ADUs) are quickly becoming one of the most talked-about solutions for homeowners looking to maximize the value and functionality of their properties. Whether you're interested in generating rental income, creating more space for family, or simply investing in your future, ADUs present a compelling opportunity worth exploring.
We are seeing an increase in ADU construction across Washington as well as many other states across the country. Developers are building ADUs like crazy, which is always a good indicator that they are a sweet investment.
But how can individual homeowners take advantage too? Let’s start by breaking down what ADUs are and how they might fit into your life.
What is an ADU (and why should you care)?
ADU is an umbrella term that stands for “accessory dwelling unit,” that both a DADU and AADU fall under this umbrella. An AADU (attached accessory dwelling unit) can take many forms as long as it is attached to the main home but is commonly seen as a basement apartment or a unit over the garage. A DADU (detached accessory dwelling unit) on the hand, is fully separated and detached from the main home, so think of the classic mother-in-law style backyard cottage or standalone structure that share the same lot as the primary residence.
These units are more than just a clever way to gain extra space, they’re a way to gently increase housing density, support multi-generational living, and offer affordable rental options within established neighborhoods. And for the homeowner, they can be both a meaningful investment and a practical solution for evolving needs.
Why AADUs are a great starting point
If you’re looking for a cost-effective way to dip your toes into the world of ADUs, attached units often make the most sense. Do you already have an unfinished basement that could be converted? Or what about that space over the garage that’s sitting empty? Converting existing space is always going to be the most cost-effective form of construction. For a relatively small investment, a homeowner can add valuable livable space with a lower initial investment.
Beyond cost savings, AADUs provide opportunities for added income or extended family living without taking on the logistics of a full construction project. These conversions are especially attractive for homeowners looking to supplement their mortgage payments or offer transitional housing for loved ones.
DADUs offer more space and even more possibility
Detached ADUs may require a higher investment, but they come with their own set of distinct advantages. With no shared walls, DADUs offer greater privacy for both homeowner and tenant. They can also be designed from the ground up to meet specific needs, whether that is a cozy guest house, a creative studio, or a long-term rental.
Many jurisdictions across Washington now allow more generous square footage for DADUs than in the past. In Kirkland, for example, you can build up to 1,200 square feet, which is more than enough to rival many townhomes. Thanks to their standalone nature, DADUs often feel more like true homes than secondary spaces.
You also have more creative freedom. Want your DADU to match the style of your main home? Great. Prefer to use the opportunity to try something entirely new? That works too.
As the homeowner, how does this increased investment in building a ADU benefit you?
The return on investment for ADUs, particularly DADUs, is one of their most compelling features. Renting out a detached unit often commands higher monthly income than an attached one. While the payback period may take time, the long-term financial benefits can be significant. Whether it is passive rental income or long-term property appreciation, ADUs are increasingly seen as a path to building generational wealth.
But what if you do not want to wait? Here’s where it gets really interesting…
Did you know that, here in Washington State, you can actually sell your ADU separately from the main home?
It’s true! This can actually be done with either attached or detached units! Right now, a stand-alone DADU sized unit is selling for much more than it costs to build, so if you were to build a DADU in your backyard and then immediately sell it, you have a great opportunity for an immediate pay-out, while providing another family with a fantastic place to live at an attainable price.
Why now?
Washington State law has recently changed to allow more density (with a rolling clock depending on jurisdiction) and ADUs are popping up all over the state. While there are still zoning regulations clarifying where/how big ADUs can be, there are more opportunities than ever before!
There is a lot more to dive into here so if you are interested in learning more about your property and if you can add an ADU (or two!) then give us a shout and we can help you explore your options.
A few more reasons to consider an ADU
Still on the fence? Here are a few more upsides to keep in mind:
- Property Value Enhancement: The addition of a DADU can boost the property's overall value, making it a sound investment.
- Community Benefits: ADUs contribute to increasing the availability of affordable housing options within the community, fostering a more diverse and inclusive environment.
- Flexibility: ADUs can serve a variety of purposes depending on the homeowner's needs. They can be used as guest houses, home offices, studios, or living spaces for extended family, adding a level of flexibility to the property.
- Sustainability: Due to their smaller size, DADUs often have a lower environmental impact than traditional homes. They require fewer materials to build and less energy to heat and cool, making them a more sustainable housing option.
- Extended Family Living: For older adults who value their independence but require some level of support, an ADU can be an ideal solution. It allows them to live close to family members, providing peace of mind while preserving their personal space. Or maybe, you could use a little help with your kids, and this allows everyone a connection while still having personal space.
- Reduced Sprawl: By optimizing the use of existing residential land, ADUs can help decrease urban sprawl. This efficient use of land can lead to less reliance on automobiles, reduced commute times, and a decrease in the carbon footprint associated with suburban living.
Looking ahead
In the face of a continually evolving urban landscape, ADUs offer an innovative and flexible solution to address diverse housing needs. Financially, socially, and environmentally, they represent a thoughtful approach to housing that aligns with many of the values we hold dear at Atelier Drome: intentional design, thoughtful community growth, and sustainable solutions that work for the long term.
Of course, like any project, there are considerations. From permitting and construction costs to privacy and tenant management, it is important to go in with a clear understanding of what to expect. But when approached with care and the right partners, an ADU can become a meaningful part of your property and your future.
As our cities continue to grow and evolve, it becomes imperative to embrace innovative solutions. ADUs, with their unique blend of benefits and adaptability, present an intriguing answer to this call.
Ready to Explore the Possibilities?
We love helping homeowners discover what is possible with their property. If you are wondering whether an ADU could be a smart next step for you, let’s chat. Whether you are dreaming of a backyard cottage, a basement rental, or something in between, we are here to help you create a solution that is just right for your goals, your space, and your life.
There's more to check out...
