With ever-increasing housing prices, you could pay an average of $382,000 for a small family home by 2030. That makes affordable housing an impossible dream for many US citizens.
Based on this, it might seem like a good idea to build an ADU to bring in some welcome extra income. Even if you don’t have plans to house your relatives, ADU rental income can make the cost of building one worthwhile.
All good home improvement plans start with a budget. So, while you’re calculating yours, consider these hidden ADU building costs, too.
1. Permitting Costs
You must get permission from your municipality before building an ADU.
According to this site, https://www.theswcollective.com/blog/adu-construction-los-angeles, permit costs can range from $2,000 to $8,000 depending on where you live.
You’ll also need to pay city infrastructure fees related to water and sewage in some areas.
Finally, you must pay a permit fee for your electrical and plumbing subcontractors, ranging from $1,000 to $2,000.
2. Improvements to Build an ADU
Older homes don’t have the electrical infrastructure to support an additional building. That means you’ll need to upgrade these utilities before you build an ADU.
Improving your electrical supply can set you back a few thousand dollars.
Likewise, there’s a good chance your backyard isn’t ideal for building an ADU right away. You’ll likely need to level space for it and may need to remove trees or other garden elements, too.
Earthmoving equipment doesn’t come cheap. So, you can add another $250 per square foot to the costs.
3. Cost of ADU Designs
Unless you buy a pre-approved ADU design, you’ll need to get an architect to help you put together plans for your ADU. These professionals charge from $11,000 to $14,000, depending on the size of your ADU.
Depending on the location of your proposed ADU, you might need to enlist the services of a structural engineer, too. That could add as much as $5,000 to your ADU cost.
4. Interior Finishes
This is one area where you have some control over your spending. However, the better the finishes and decor you add to your ADU, the more rent you can charge.
The high cost of decor and fittings is most often overlooked by homeowners when building an ADU. These buildings might be small, but they still require a full range of furniture like beds, appliances, faucets, bathroom amenities, and more.
Whether you’re opting for all the bells and whistles or only the basics, don’t forget to factor these costs into your budget.
More Home Improvement Ideas
Apart from bringing in extra income due to rentals, an ADU can serve as a studio for yoga classes or other workshops. It’s also a handy place to house a home gym or office.
When you build an ADU, it’s best to approach the project with all the facts in mind. Now that you’re aware of the hidden costs, you can look into the actual building costs to help figure out whether it’s a worthwhile endeavor for you.
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