What Does It Cost to Build an ADU? A Detailed Breakdown

As housing prices continue to rise, Accessory Dwelling Units (ADUs) have become a popular solution for homeowners looking to add value to their properties. Whether you're building an ADU in Los Angeles, San Diego, or the Bay Area, understanding the cost factors, financing options, and potential rental income can help you make an informed decision. At Build To Perfection, we specialize in designing and constructing high-quality ADUs, ensuring compliance with local building codes while maximizing your investment.

Breaking Down the Cost of an ADU

The cost of building an ADU varies based on size, location, materials, and labor. Here’s a general breakdown:

1. Design and Permits ($5,000 - $20,000)

• Architectural plans

• Structural engineering

• Building permits

• Impact fees (varies by city)

2. Site Preparation ($5,000 - $25,000)

• Demolition (if needed)

• Soil grading and excavation

• Utility connections (water, sewer, electricity)

3. Construction Costs ($100,000 - $300,000)

• Foundation: $10,000 - $30,000

• Framing: $20,000 - $60,000

• Roofing & Siding: $10,000 - $40,000

• Plumbing & Electrical: $20,000 - $50,000

• Interior Finishes (flooring, cabinets, paint, etc.): $30,000 - $80,000

4. Additional Costs

• Appliances & Fixtures ($5,000 - $15,000)

• Landscaping ($3,000 - $10,000)

• Furnishings (optional but recommended for rental units)

Total Estimated Cost:

• Garage Conversion ADU: $80,000 - $150,000

• Detached ADU: $150,000 - $300,000

• Attached ADU: $100,000 - $250,000

Financing Options for Your ADU

Many homeowners choose financing solutions to cover the cost of building an ADU. Here are the most common options:

1. Home Equity Loan or HELOC

• Borrow against your home’s equity.

• Lower interest rates than personal loans.

• Best for homeowners with substantial home equity.

2. Construction Loan

• Short-term loan that converts into a mortgage.

• Funds disbursed in stages during construction.

• Ideal for larger ADU projects.

3. Cash-Out Refinance

• Replace your current mortgage with a larger one.

• Access lump sum cash for your ADU project.

• Beneficial if mortgage rates are low.

4. Government Incentives & Grants

• Some cities offer grants or low-interest loans for ADU construction.

• California’s CalHFA ADU Grant program provides assistance.

Rental Income Potential: Is an ADU Worth It?

One of the biggest advantages of building an ADU is its potential for passive rental income. Rental rates depend on location, size, and amenities:

• Studio or One-Bedroom ADU: $1,500 - $3,000/month

• Two-Bedroom ADU: $2,500 - $4,500/month

• Luxury ADU (High-End Finishes): $3,500 - $6,000/month

In high-demand areas, ADUs can generate $20,000 - $50,000 per year, helping homeowners pay off their mortgage or increase their overall property value.

Why Work with a Licensed Contractor Like Build To Perfection?

Building an ADU is a significant investment, and working with a licensed general contractor ensures that the process is smooth, compliant, and high-quality. Here’s why choosing Build To Perfection is the right decision:

• Expertise in Local Building Codes: Avoid costly mistakes and delays.

• High-Quality Craftsmanship: We use durable materials and skilled labor.

• Efficient Project Management: From design to completion, we handle everything.

• Transparent Pricing & Budgeting: No hidden fees or surprises.

Start Your ADU Project Today

Whether you’re looking to create additional living space, generate rental income, or boost your home’s value, an ADU is a smart investment. At Build To Perfection, we help homeowners navigate the entire process—from permits to construction—to ensure a seamless experience.

Contact us today for a free consultation and let’s bring your ADU vision to life!