Trends in Multigenerational Living

Is an Accessory Dwelling Unit Right for You?

Accessory Dwelling Units, also known as granny flats or in-law suites, are part of a shift toward smaller, more affordable, and energy-efficient housing options. Where permitted, ADUs can serve as residences for elderly parents or adult children to live in, or be utilized as home offices and guest homes. In some areas, they can be rented out or used as housing for the owners, with the main house rented out.

As a home buyer or homeowner, you may consider adding an accessory dwelling unit (ADU) to your property. For example, you could create an ADU by converting a detached garage or building an apartment above an attached garage. It could be part of a basement, with a separate entrance, or a new structure (if the property is big enough).

ADUs Can Increase Property Value

Increasing a property's value or utility is always a primary consideration for homeowners and residential real estate agents. One way to achieve this is by adding an accessory dwelling unit (ADU). These additional living spaces can significantly boost rental income or offer the homeowner's family more space. The financial benefits of ADUs, whether through rental income or increased property value, make them an attractive and potentially lucrative option for property investment.

Above: A 1977 Stuart, FL residence shown with an original attached ADU

An ADU could be a critical decision, depending on your situation. A home with an ADU (or the potential to add one) can benefit families with elderly parents or grandparents, adult children with disabilities, adult children returning home, live-in caregivers, or those needing supplemental income through renting out the space. For instance, a basement apartment in a high-demand area could generate [specific amount] per month. ADUs enable families to provide certain family members or caregivers with the privacy they need while remaining together. They can also be an excellent option for those who want to rent out part of their home to help offset their mortgage payments. Some types of accessory dwelling units (ADUs) that bring additional utility and value to homes:

Basement apartment: This involves a separate walk-out or walk-up entrance to the basement. Although it may not be accessible from the main home from the inside, it is usually less expensive to construct.

Garage conversion: These can be detached or attached. This option deducts parking value, so consider other parking solutions. Clients should be aware that the cost may be significant if the existing structure requires substantial modifications.

Detached ADU: This stand-alone facility offers homeowners the most flexibility and value, allowing them to maximize their property's potential. While constructing a new structure can be more expensive, the long-term benefits and versatility of a detached ADU make it a compelling option.

Junior ADU: These are attached to the main home but are smaller in size. A typical example is a sun porch or home addition. These may share some spaces and utilities with the rest of the house.

Research ADU Regulations

Determine if your area is ADU-friendly by visiting your city's planning and zoning website, calling the office, or visiting the local office. Some areas encourage ADUs, and others don't. Even if your city's regulations seem to discourage ADU construction, you may be able to secure a waiver to build one. Ask. Study: ADUs Can Add 35% to Your Home's Value. Get the Report

Do a Cost Evaluation

If you want an ADU to generate rental income, consider the total cost of permits, construction, and the resulting increase in annual property taxes. Compare this to the monthly payment you expect to receive to determine how long it will take for the ADU to pay for itself before you realize any income.

Consider Your Lifestyle and Needs

Privacy vs. Company – If you are a private person, having a renter on your property may present difficulties. However, you may need to find the right renter if you are looking for more social interaction. Assistance – If you have special needs, consider trading maintenance, cleaning, or personal services for part or all of the rent on your ADU. It may be economical to retain your independence, even with physical limitations.

Aging in Place – If you want to age in place, an ADU built with universal design concepts may help you stay on your property while improving your financial situation. For example, you could rent out a house that is too large or unsuitable for aging in place while staying in the ADU and the neighborhood you know and love.

Adult Children - If you have adult children who have returned home to live with you, an ADU may be a cost-effective option. It will keep your children (and possibly grandchildren) close while maintaining privacy.

Related Article: Trends in Multigenerational Living. Multigenerational living is a multifaceted trend, though there's no single solution to make it work. Families and builders are working to meet the needs with creative, flexible solutions. [Content by Barbara Ballinger]

Talk to Your Real Estate Specialist

ADUs may not be suitable for everyone, but adding an accessory dwelling unit to your property can increase its value and utility. These additional living spaces can provide extra income through rentals or offer more space for your family. For more perspectives, consider speaking with an SRES® in your area who is familiar with the local market rules and can help you determine if this is a suitable option for you.

This post is by Eric Slifkin, REALTOR® serving South Florida's Treasure Coast. You can reach Eric at 772-288-1765.