The four main ADU types
Detached new construction is a standalone second dwelling — essentially a tiny house on your lot. This is the most expensive option at $350 to $650 per square foot in most markets, because you’re paying for foundation, roof, utilities, and a full exterior envelope. A 600-square-foot detached ADU commonly lands between $210,000 and $390,000. Detached ADUs usually command the highest rent and add the most to property value.
Garage conversions turn an existing attached or detached garage into a living unit. This is the cheapest ADU path at $100 to $280 per square foot because the shell is already standing. A 400-square-foot garage conversion typically runs $80,000 to $160,000 including new insulation, drywall, HVAC, a kitchenette, and a bathroom. You lose the garage — plan where the cars go.
Basement ADUs carve a legal second unit out of existing basement space. Cost runs $140 to $280 per square foot depending on whether egress windows, full bathrooms, and separate entrances need to be added. A 700-square-foot basement ADU lands between $98,000 and $196,000. The big variables: egress window installation (expensive with solid concrete walls), ceiling height (most codes require 7 feet minimum), and moisture control.
Attached ADUs share a wall with the main house — often built as a ground-floor addition with a separate entrance. These run $250 to $450 per square foot and split the difference between detached and basement options. They’re architecturally flexible but often trigger the same permit process as a detached ADU.
California SB 9 and statewide ADU rules
California has the most aggressive ADU policy in the country. Every single-family lot can build one ADU plus one Junior ADU (up to 500 sq ft) by right. SB 9 additionally allows most single-family lots to split into two parcels with two units each — effectively four units where one stood. Cities cannot impose owner-occupancy requirements, cannot charge impact fees on ADUs under 750 sq ft, and must approve permits within 60 days. Setbacks are capped at 4 feet. Fire sprinklers cannot be required unless the primary residence has them.
Other states are following California’s lead. Oregon, Washington, and Maine have statewide ADU legalization. Massachusetts, Vermont, and New Hampshire have proposed similar laws. Check your state and city rules — the last five years have completely rewritten what’s possible.
Utilities: the hidden cost killer
Utility connections can easily add $20,000 to $80,000 to an ADU project. If your existing water, sewer, gas, and electric services can absorb a second unit, you save. If they can’t — common on older properties — you’re looking at a new service drop, a larger electric panel, water main upsizing, or a new sewer tap. Some municipalities require separate meters for ADUs, which adds $3,000 to $8,000 per utility.
Trenching distance matters: the longer the run from the main house or street to the ADU, the more you pay. Expect $40 to $120 per linear foot of trench for combined utility runs. A detached ADU 80 feet from the house and 30 feet from the street easily racks up $6,000 to $15,000 in trenching alone.
Permits and soft costs
Soft costs run 12 to 20 percent of construction on most ADU projects. Architect or designer fees are $5,000 to $25,000 depending on whether you use a pre-approved plan (most ADU-friendly cities publish them free) or custom design. Structural engineering is usually $2,000 to $5,000. Permits scale with project value — $2,000 to $10,000 is typical in California metros, less elsewhere. Plan for a 60 to 120 day permit cycle, or longer if any variance is needed.
Pre-fab and modular ADUs
Pre-fab ADU companies like Abodu, Cover, and Samara deliver factory-built units that install in days. Pricing runs $250,000 to $500,000 delivered and installed for 400 to 1,000 square feet. The premium over site-built is real, but you gain a 6 to 12 month timeline instead of 18 to 30, and fixed pricing with fewer change orders. Financing can be tricky — some lenders treat modular ADUs like manufactured homes.
Rental income math
ADU rents range from $1,200 to $4,500 per month depending on market, size, and quality. In expensive metros, a well-done ADU commonly rents for $2,500 to $3,500 and covers most of its construction debt service. Simple math: a $250,000 ADU at 7% on a 30-year note costs about $1,660 per month in principal and interest. If it rents for $2,800, you clear $1,000 per month after taxes, insurance, and maintenance, plus the unit adds roughly 20 to 35 percent to property value.
Common mistakes
The biggest mistake is under-budgeting utilities. The second is picking a designer who’s never done an ADU — the permit strategy, code triggers, and cost-control decisions require experience. The third is skipping the sound-isolation and private-entrance details that make ADUs rentable — landlords regret cheaping out on these for decades.
When to call a pro
Start with a one-hour consultation with an ADU-specialized architect or design-build firm. For $200 to $500 they’ll tell you what’s buildable, what it costs, and what permits take. That conversation alone is worth it before you pick a GC or commit to pre-fab. Get three construction bids on the finished drawings — ADU bids commonly vary 30 to 50 percent for the same scope.