Enter your property details to get a full ADU feasibility study — construction cost by type and finish level, rental income estimate, break-even timeline, property tax impact, and a lender-ready PDF summary.
1
Location & Property
$
Effective rate: 1.00%
2
The ADU
500 sqft — 1–2 Bedroom
150 sqft1,200 sqft
Mid-Range — $325/sqft
Rental GradeMid-RangePremium
15%
10%15%20%
3
Intended Use
10 yrs
1 yr15 yrs30 yrs
$
Est. $1,500/mo for 500 sqft in this area
Optional — For Depreciation Estimate
$
📊
Negative Monthly Cash Flow: At current estimates, this ADU costs $701/month more than it earns during the loan period. It still builds equity — you'll cover the gap until break-even.
The Numbers
Total Project Cost
$221k
All-in build estimate
Monthly Net Income
$866
$1,500 gross
Monthly Loan Payment
$1,567
HELOC
Monthly Cash Flow
-$701
After all costs
Estimated Instant Equity at Completion
+$44,250
Spend $221,250 → home gains ~$265,500 in value. Value estimate based on comparable ADU sales. Actual appraisal varies.
ADU Value in 10 Years
$393,005
At 4.0%/yr appreciation.
Estimated Annual Property Tax Increase
$2,655/yr($221/mo)
Monthly Income Breakdown
Gross Rent+$1,500
Vacancy (1 month/yr)-$125
Maintenance Reserve (1%/yr)-$184
Insurance Increase-$104
Property Tax Increase-$221
Net Monthly Income$866
Your Return
Break-Even Analysis
At current estimates, this ADU pays for itself in Year 1. After that, every month generates ~$866 in net profit.
Break-even
Yr 1
ROI Summary
Timeline
Total Return
Total Cost
Net Gain
ROI
5 Years
$374,981
$315,270
+$59,711
+27.0%
10 Years
$496,925
$409,290
+$87,635
+39.6%
20 Years
$789,583
$597,330
+$192,253
+86.9%
Total Return = cumulative net rent income + ADU equity (at 4.0%/yr appreciation). ROI calculated on initial project cost.
Long-Term Wealth
ADU Investment
$88k
10-yr net gain (rent + equity)
S&P 500 (7% avg)
$214k
10-yr passive return
✓ Best return
High-Yield Savings (4.5%)
$122k
10-yr interest earned
S&P 500 comparison assumes passive investment of the same capital. ADU returns include rental income + appreciation. Past returns don't guarantee future results.
Want the full picture — taxes, buy vs rent comparison, and net worth projection?
Whether an ADU is worth building depends on three things: your local rental market, your construction costs, and how long you plan to hold the property. In high-demand markets — California, the Pacific Northwest, major metros — ADUs routinely break even through rent alone in 8–12 years and deliver immediate equity gains of 5–20% above construction cost.
The most compelling case for an ADU isn't always the rent check. Building a detached ADU in a strong appreciation market can add $1.10–$1.20 in home value for every $1 spent — you build equity from day one, before a single tenant moves in. Use the calculator above to model your specific situation.
8–12 yrs
Typical break-even
High-cost markets
110–120%
Value added
Of build cost
$900–$2,800
Monthly rent range
Varies by market
🏗️
ADU Cost Guide 2026
Construction costs vary significantly by type, finish level, and region. Soft costs (permits, architecture, utility hookups) add 15–25% on top. Always budget a 15% contingency — surprises are the rule, not the exception.
ADU Type
Cost/sqft
Value Added
🏠 Detached New Build
$250–$400
120%
🚗 Garage Conversion
$100–$200
110%
🏡 Attached Addition
$175–$300
115%
🏗️ Basement Conversion
$75–$150
105%
🏢 Internal Conversion (JADU)
$50–$100
100%
Value added = estimated % of project cost added to home value. CA/NY add ~35–40% to base costs; OH/GA/NC run ~10–12% below.
📬
How Much Can an ADU Rent For?
ADU rents track closely with local market rates. As a rule, ADUs command 75–100% of comparable apartment rent depending on size and finish. This calculator uses ZIP-code and county-level median rent data to estimate your unit's potential.
Studio ADU (under 400 sqft)
Priced at ~75% of market rent
$900–$1,800/mo
1-BR ADU (400–600 sqft)
Priced at ~90% of market rent
$1,200–$2,400/mo
2-BR ADU (600+ sqft)
Priced at market rate
$1,500–$3,200/mo
Short-term rentals (Airbnb/VRBO) can generate 30–80% more gross income but carry higher management effort and regulatory risk.
🏦
ADU Financing Options
📈Most popular
HELOC
Home Equity Line of Credit
Draw against your equity. Interest-only during construction. Best if you have strong equity.
7.5–9.5% variable
🔄
Cash-Out Refi
Cash-Out Refinance
Refinance for more than you owe, use the difference. Good if rates are close to your current rate.
6.5–8.0% fixed
🏗️
Construction Loan
Short-term build financing
Draws in phases as work progresses, converts to permanent loan at completion.
8.0–10.5% — higher
💵
Cash
All upfront
No financing cost, but capital stops compounding. $200k cash = ~$140k opportunity cost over 10 yrs.
0% interest
❓
ADU Calculator — Frequently Asked Questions
How do I calculate ADU ROI?
ADU ROI is calculated by dividing your total return (cumulative net rental income plus the increased home value from the ADU) by your total project cost. A typical ADU in a high-cost market breaks even through rental income alone in 8–12 years, but builds equity from day one.
How long does it take for an ADU to pay for itself?
Break-even depends on construction cost and local rents. In high-rent markets like California and the Pacific Northwest, ADUs often pay back their construction cost through rent in 8–12 years. In lower-rent areas, rent-only break-even may take 15–20 years — but appreciation of the ADU's added home value can accelerate the timeline significantly.
What is the average cost per square foot for an ADU?
ADU construction costs vary significantly by type and region. Detached new builds average $250–$400/sqft. Garage conversions cost $100–$200/sqft. Attached additions run $175–$300/sqft. Basement conversions are $75–$150/sqft. Internal conversions (JADUs) are the most affordable at $50–$100/sqft. High-cost states like California and New York add 25–40% to these base costs.
Does building an ADU increase property taxes?
Yes, in most states building an ADU triggers a partial property tax reassessment. The typical increase is 1–1.5% annually on the added home value. California is an exception — under Proposition 13, only the ADU portion is reassessed, protecting your main home's assessed value. Some states like Oregon and Washington may offer temporary ADU tax exemptions.
Is an ADU a good investment?
ADUs are generally good investments in markets with strong rental demand and home appreciation. They typically add 100–120% of construction cost to your home's value, providing instant equity. Combined with rental income — often $1,000–$3,000/month depending on location — and long-term appreciation, ADUs outperform the S&P 500 in many high-cost markets over 10+ year horizons.
What financing options are available for building an ADU?
The most common ADU financing options are: (1) HELOC — draw against your home equity at variable rates, interest-only payments during construction; (2) Cash-out refinance — refinance your mortgage for more than you owe, use the difference; (3) Construction loan — short-term loan covering the build, converts to permanent financing after completion; (4) Cash — no financing cost but opportunity cost of capital.
What are the tax benefits of building an ADU?
For rental ADUs, you can depreciate 80% of construction cost over 27.5 years under IRS residential rental rules, generating annual deductions of roughly 2.9% of construction cost. At a 22% federal bracket, a $200,000 ADU yields about $2,100/year in tax savings from depreciation alone. Note: depreciation is recaptured at 25% when you sell. Consult a tax advisor.
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