Struggling to find the right home within your budget? Or maybe you’re looking for extra space to generate income or accommodate aging family members? Either way, an accessory dwelling unit (ADU) might be just the solution you need in today’s market.

What Is an ADU?

Fannie Mae defines an ADU as a small, self-contained living space on the same lot as a single-family home. It must include separate areas for living, sleeping, cooking, and bathing, independent from the main house. There are different types of ADUs, including:

• A basement apartment within the main home
• A space attached to the home, like an apartment above the garage
• A completely detached unit, such as a manufactured home

Why Are ADUs Gaining Popularity?

ADUs are becoming more desirable as buyers realize their many benefits. In fact, 24% of real estate agents report that ADUs, like mother-in-law suites, are high on buyers' wish lists.

The rising cost of living makes ADUs particularly attractive, as they can help offset expenses. Whether you buy a home that already has one or add one yourself, an ADU can provide the opportunity to rent out that space and generate income to help pay your mortgage.

Here are a few additional reasons why ADUs are a great option:

1. Close Yet Independent Living

An ADU gives you the perfect balance of togetherness and privacy. Whether it’s for family or guests, you get the advantage of having them nearby but still with their own space.

2. Aging in Place

ADUs are also a wonderful solution for aging loved ones who want to remain close to family while maintaining their independence. If you have parents who are getting older and need extra care, an ADU offers the perfect setup for support without compromising their autonomy.

3. Built-In Childcare

Having family live in the ADU can also be a great childcare solution, saving you money while giving your kids more time with their grandparents.

It’s important to note that because an ADU is considered a secondary dwelling, it generally cannot be sold separately from the main home. While this is slowly changing in some states, regulations can vary, so it’s crucial to check with a local real estate expert for the most up-to-date information.

Bottom Line

If you’re considering buying a home with an ADU or adding one to your current property, it’s definitely worth exploring. Be sure to consult with a real estate agent who can guide you on local codes and regulations and help you understand your options in today’s market.

What’s your motivation for looking into an ADU?