Pros and Cons of building an ADU in your backyard

Pros and Cons of building an ADU in your backyard

The housing crisis is a complicated issue that has an impact on numerous communities all around the world. In many areas, there is a shortage of affordable housing and a housing shortage has resulted in increasing rents. Using accessory dwelling units (ADUs) is one option for solving this issue. ADUs are secondary housing units that can be constructed on the same property as a primary residence to add extra living space. This blog article will discuss the possibilities of ADUs and how Stateful may assist you in investigating ADUs on your current property. The laws across the US are changing now to make building ADUs easier for homeowners. ( Ref 1, Ref 2 )
This also means that there is an opportunity for homeowners to make money from their backyards. Selling your backyard can be a great way to make some extra money. You can get in touch with us to know how to make money from your backyard

What are the various factors that a homeowner needs to consider before deciding on whether to build an ADU on their property?

There are three very prominent pros of building ADUs on the property, let us explore these in detail-
  1. Financial benefits
  2. Family unit/social benefits
  3. Neighborhood benefits.
Financial Benefits: ADU can be a source of income stream if the homeowner decides to rent it out. if you rent it out. It can also be a source of equity (extra cash) in case you decide to sell it off. lower yard maintenance and possible reduction of prop taxes add up to another $3000/month in savings on average( Ref 3 , Ref 4 ) Family unit/social Benefits: ADUs are quite popular with families who have relatives visiting them often, or even have a mother-in-law unit where extended family lives next door. ADUs can provide a solution for multi-generational families who want to live together but maintain some level of independence. ADUs can provide a separate living space for adult children, elderly parents, or other family members, while still allowing them to be close to their loved ones. Neighborhood Benefits: In the near future, especially with the changing laws, more and more neighborhoods will see ADUs pop up. Increasing the housing supply for the missing middle will contribute to safer neighborhoods, more city resources, etc. And in such a scenario, it is always good to get in first because many cities have strict zoning laws that limit the size and location of ADUs, which can make it difficult for homeowners to build them.

What then makes it not so ideal to have an ADU in your backyard?

  1. Doesn’t meet your personal needs : For a lot of families, the backyard serves an important purpose for them and their family already. It may already be in use as a play zone, for gardening or having a vegetable gardener, workshop area, etc. In such a scenario, the current purpose for which the backyard is being used holds more value and hence the owner may not be willing to let go of it to build an ADU.
  2. Upfront capital costs : You’ll need about $100k in cash upfront to get the process started, and then another $100k to   complete. This is obviously a lot of cash for most homeowners, which is why building an ADU is the most popular with   homeowners who have a lot of savings. Stateful helps homeowners who don’t have extra cash lying around to build an   ADU to be able to build the ADU without having to have the extra upfront capital fund for it. (Ref 5 , Ref 6 , Ref 7 , Ref 8)
  3. Permitting/vendors/management hassle : There are dozens of time-consuming and complicated steps which need to be   complete in order to build an ADU- right from ordering the right surveys to completing architectural and structural   engineering plans. Permitting alone can be a very complicated process that takes months for first-timers. At Stateful, our     capabilities lie in permitting, architecture, local vendor networks, and engineering and construction partners. We can help   you do everything right from getting the surveys done to the plans.


The above should be able to give homeowners an idea of what factors to consider before deciding to build an ADU. If you are interested in learning more about how to maximize the value of your backyard through building an ADU, contact Stateful for a free, in-depth consultation