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Are ADUs The Newest Real Estate Trend?
Accessory dwelling units allow for multi-generational living in your backyard and provide a possible source of passive income on your property.
If your property doesn’t already have a guest house, adding one may have never crossed your mind. But during the COVID-19 pandemic, families have started to turn to accessory dwelling units (ADUs) to overcome the challenges of isolation together, while still maintaining independence and privacy. If you haven’t heard of ADUs before, they are best described as smaller, independent dwelling units located on the same property as another stand-alone, single-family home. They are also referred to as accessory apartments, granny flats, and second units.
Adding an ADU to your property can come with many benefits. For example, you have a nice place for guests to stay when they come to visit you from out of town. Alternatively, many people like to rent their ADUs to family members, such as adult children who just graduated from college. It could also potentially be rented out as a passive source of income. With the rising popularity of the tiny home movement and mass housing shortages, the extra dwelling units fill a real need. Many renters are happy to live in affordable ADUs that allow them to focus on experiences rather than stuff. In addition to rent, sources like The Nest and the National Association of Realtors report that ADUs on your property can increase the value of your home.
Lately, another trend concerning ADUs has come to light. During the pandemic, people were often frustrated and saddened when they couldn’t visit their parents or elderly family members in their senior living homes. So instead of turning to assisted living facilities when older relatives begin to need extra help or their own homes become too much to handle, families are adding ADUs to their homes as a form of “backyard multigenerational living.” This helps family members stay together and avoid isolation, as well as provide each other with emotional, practical, and financial support (think childcare and eldercare). Aging relatives typically enjoy being close to their adult children and grandchildren, and living on the same property means someone is always present whenever help is required. At the same time, family members who live in the ADU get to maintain their privacy, boundaries, and independence since the unit is separate from the main house.
Of course, ADUs are not a perfect solution and may not be right for every family. There are challenges to overcome depending on where you reside, such as local regulations and neighborhood opposition. While ADUs are typically much more affordable than a typical single-family home, keep in mind that they do still cost a pretty penny. The average cost to build a new ADU that has most (if not all) of the amenities of a single-family home ranges from $100,000 and $300,000. But at this time, lenders have not really jumped onboard the ADU bandwagon, which means there are few loan options available to finance your property’s new addition.
That said, some companies and DIY home improvers have gotten extremely resourceful and creative in adding the perfect ADUs to their properties. We have to say we were impressed by how luxurious these tiny homes could be! For example, a startup in Florida called Into The Box is leading the charge to create new housing from recycled materials. The company upcycles shipping containers into studio, one-bedroom, and two-bedroom dwelling units. Into The Box’s prices start at less than $100,000 and their “boxes” offer full kitchens with apartment-style floor plans designed by professional interior designers. They are surprisingly nice and a great way to live sustainably.
In Minnesota, YardHomes is the go-to vendor when it comes to building accessory dwelling units that can fit any space and budget. YardHomes offers plans to customize your own ADU to your preferences, or you can choose from readymade units in a variety of styles. For example, YardHomes offers the more contemporary CitiCabin series or the rustic cottage series. The cottage series is handicap accessible, which may make it a good choice for older residents.
While these innovative companies are state-specific, some options are available nationwide. If you are willing to join a waitlist of 47,000 people, you could be one of the first to get a 375 sq ft Boxabl Casita. The miniature units can be delivered to your backyard and ready to move into in only an hour. Despite its small size, the luxurious interior will also feature a full kitchen and bathroom, air conditioning and heating, an included washer and dryer, and high ceilings. One of its perks is ultra-low utility bills!
But if you don’t want to wait and are eager to take on a DIY project, head to your local Home Depot. Some creative homeowners, such as the Smith Family in Georgia, were able to customize a Home Depot Tuff Shed into the perfect tiny home for just about $60,000. When you consider that the average home in America is sold for $344,141, that’s a pretty good deal! The Tuff Sheds come in 30 different colors, and have all the basics for a future accessory dwelling unit. It features standard 8-foot walls on the first floor, a full second floor, 36-inch stairs, and an entry door with locks and boxed eaves on all walls. Customers can then customize and trick out the shed to make it a luxurious tiny home, or extra dwelling unit on their property. Learn more about the Tuff Shed here!
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