The Real Cost of Building an ADU in California

Understanding the different costs involved when building an Accessory Dwelling Unit (ADU) in California is crucial to making budget-conscious decisions for your project.

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Explore the Breakdown of Expenses for Accessory Dwelling Units

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Fernanda Castillo

Gain insight into the diverse factors influencing the ultimate cost of your ADU, from size and design to materials and labor, for informed decision-making in your construction project.

1

Cost Breakdown of Building an ADU

2

How to Save on ADU Building Costs

3

DIY vs. Hiring a contractor vs. Full-Service company

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How much does it cost to build an ADU in California?

The average cost of building an Accessory Dwelling Unit in California can range from $120,000 to $350,000+, according to a study by California ADU, a project by UC Berkeley’s Center for Community Innovation.

The final cost of your ADU will depend on several factors, such as the size of the unit, the zoning regulations in your area, the number of bedrooms, and the type of ADU you choose to build. Also, the average cost per sqft may vary depending on your city, but in California it usually ranges from $345psf – $425psf. 

Keep in mind that if you’re considering investing in an ADU for your property, it’s crucial to weigh the costs and benefits beforehand. ADUs can provide a great long-term value to your property, but breaking down all the expenses involved, such as construction, permits, and any additional fees, is key to making an informed decision. By doing so, you can determine if an ADU is a suitable investment. 

Want to learn about the entire process of building an ADU? Read our comprehensive guide, “How To Build an ADU: The Definitive Guide” .

Factoring in ADU Costs

When it comes to determining the final cost of an ADU, several factors come into play. These elements can significantly impact the overall price tag of your ADU project. Factors such as the size, location, amenities, and specific design features contribute to the total cost. 

In the following sections, we’ll delve into each of these factors to provide a comprehensive understanding of how they influence the cost of building an ADU. Understanding these factors is crucial for planning and budgeting your ADU project effectively.

 

1. Types of ADUs 

Attached: Attached ADUs are integrated into the primary dwelling, meaning they share at least one common wall with the main house. This type of ADU is ideal for homeowners seeking additional living space without significantly expanding their property’s footprint. 

An attached ADU can range between $100,000 to $216,000

Detached ADU: Detached ADUs are standalone structures separated from the primary residence, offering complete privacy and independence. These units are perfect for homeowners looking to maximize rental income, host long-term guests, or create a tranquil retreat on their property.

The size limit for this type of ADU can vary depending on local zoning regulations, building codes, and specific ordinances set by your city or municipality. In some areas, there may be no particular size limits for detached ADUs, which allows for more flexibility in their design and construction. For example, a detached ADU can be up to 1,200 sq ft in South California.

A detached ADU can cost from $110,000 to $300,000. Unlike attached ADUs, detached ADUs require a new structure to be built instead of sharing it with the main dwelling.  

Garage Conversion: Garage conversions turn an existing garage into a fully functional living space. These units are cost-effective for repurpose unused space and are particularly popular for short-term rentals. Doing a garage conversion instead of a regular detached or attached ADU can be cheaper and faster, rounding up to $60,000 to $150,000.

Learn how to successfully convert your garage with our blog “Garage to ADU: The 2024 Ultimate Conversion Guide” and make the most of your available space.

2. Size

The size of the ADU is a key factor when determining the unit’s price, as the bigger it is, the pricier it gets.
Jumpstart your ADU design journey by browsing our ADU catalog. Find the perfect size to suit your needs! 

3. Location

Certain regions of California, and even within the same county, can be more costly to build on. Prices for building materials also vary greatly depending on the zone or locality. Therefore, while constructing an ADU might cost, for example, $150,000 in one city, it can be cheaper or more expensive in another.

4. Permitting

The fees for obtaining permits can vary significantly depending on your local authorities’ specific rules and regulations. It is always recommended to thoroughly research and understand the permit requirements and associated fees before beginning any project that requires permits.

5. Foundation

When discussing detached accessory dwelling units, it is crucial to consider the foundation and installation complexity as they can significantly impact construction costs. A slab foundation is a common and cost-effective option, whereas a crawl space can be pricier. Additionally, the site’s terrain can also affect expenses; minimal site work is required for flat surfaces compared to uneven landscapes.

6. Trim and Finishing

The materials you choose to finish your project can significantly impact the overall cost. Premium materials tend to be more expensive, so opting for less expensive alternatives can help you stay within budget. However, this doesn’t mean that you have to compromise on quality. Your contractor or all-in-one company can advise you on which materials to use to achieve the desired outcome without breaking the bank.

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Cost Breakdown of Building an ADU

Building an ADU can be overwhelming, as it involves a complex process with several expenses that must be meticulously planned and analyzed. One crucial aspect to remember is the soft costs, which include permits, design fees, and inspections. These costs can add up quickly, and it’s essential to account for them before starting the project. On the other hand, the hard costs, such as materials, labor, and construction expenses, are tangible and easier to estimate. However, they still require careful consideration as they significantly impact the final budget and timeline of the project. Financial costs must also be considered, which involve financing, insurance, and other expenses associated with the project.

One often overlooked factor in ADU construction is the impact of inflation on costs. Historical data can help predict future price increases, making it crucial to secure contracts with suppliers and contractors early to lock in prices. Integrating inflation projections into the budget and prompt contract finalization ensure a smoother and more confident ADU construction experience.

To find out more about how to manage these costs and finance your ADU effectively, read our blog “The Definitive Guide to Financing Your ADU in California in 2024.”

Soft Costs

Soft costs in ADU projects usually refer to expenses beyond the direct cost of construction materials and labor. These costs are vital for ensuring compliance with the local regulations and building codes, so understanding and budgeting soft costs is needed to accurately estimate the total cost of building your granny flat.  

The fees that are typically included when considering soft costs are: 

• Architectural and Engineering Design Fees: These fees cover the costs associated with hiring professionals to design your ADU, including architects and engineers who create the blueprints and plans for your project. If you’re working with a one-stop-shop or all-inclusive service provider, these costs might already be included in your final quote. Otherwise, you can expect architectural fees to range from $20,000 to $45,000, depending on the complexity and size of your ADU.
• Consultant Fees: Consultant fees may include expenses for hiring specialists such as legal advisors, environmental consultants, or structural engineers who provide expertise and guidance throughout the ADU construction process. These fees can range from $8,000 to $12,000 and encompass services like Title 24 compliance and structural consultations. Depending on your project’s requirements, additional costs for more complex analyses, such as soil testing, may arise.
• Permit Fees: Permit fees are charges imposed by local government authorities to review and approve your ADU construction plans. These fees ensure that your project complies with building codes and zoning regulations, allowing you to begin construction legally. Permit fees usually range from $10,000 to $35,000 or more, depending on local regulations and the project size.

Any other expenses related to the project’s planning, design, and regulatory approval stages, such as inspection and testing, can be considered, so you might have to add those when calculating the soft costs. 

These costs may increase or decrease depending on whether you work with different contractors or hire a company, like Multitaskr, that can help you through the entire process of building your unit.

 

Hard Costs

Hard costs in ADU construction refer to the tangible expenses directly associated with the physical building process. These costs include materials, labor, equipment rentals, site preparation, foundation work, framing, roofing, insulation, plumbing, electrical wiring, HVAC installation, interior and exterior finishes, landscaping, and other construction-related expenditures. 

These costs are crucial in shaping the overall construction budget and usually account for the most significant portion of the total project cost. Proper management of hard costs is critical to ensure the project is completed successfully and within the initial budget to avoid unexpected expenditures.

• Site Work: Site expenses include site preparation, excavation, grading, drainage, utility connections, and any other work required to prepare the property for ADU construction.
• Structural Costs: This includes expenses related to the foundation, framing, roofing, and structural elements necessary to support the ADU’s construction.
• MEP Costs: MEP stands for Mechanical, Electrical, and Plumbing, encompassing similar installations within the ADU.
• Interior & Exterior Finishes: Interior finish costs include materials and labor for flooring, cabinetry, countertops, painting, tiling, and other decorative elements. Exterior finish costs cover siding, roofing materials, windows, doors, landscaping, and other features contributing to the ADU’s external appearance and functionality.

By categorizing hard costs, you can better allocate resources, track expenses, and ensure that each aspect of the ADU construction process is within your budget.

A few more points to consider while calculating the hard costs are the following: 

1. The hard costs can vary depending on the many additional features or types of materials used.
2. Labor costs may vary depending on your contractor’s rates, experience, and location. Different contractors may charge different rates for their services.

Financial Costs

Financial costs involved in ADUs encompass various expenses beyond construction and design. These may include financing fees, loan interest, insurance premiums, property taxes, and ongoing maintenance costs. Additionally, factors such as location, size, and type of ADU can influence financial considerations.

For example, if you plan on renting your ADU, by California’s law, you might have to pay a 1% tax increase due to your rental activities.

Check our San Diego and Los Angeles guides to learn more about renting your ADU.

The Importance of Historical Data

Planning any project requires considering future costs. Historical data on labor and material costs can be a valuable resource for this purpose. By analyzing past trends, you can anticipate potential cost increases and make informed decisions about budget allocation. This proactive approach helps mitigate the impact of inflation on your project’s financial health.

In today’s inflationary environment, securing favorable pricing early is essential. Delays can lead to significant cost overruns. By acting swiftly and leveraging historical cost data, you can safeguard your project’s financial viability and ensure its completion within budget and timeline.

To further minimize risk and maintain control over your project’s finances, consider incorporating inflation projections into your budgeting process. Additionally, promptly securing contracts with suppliers and contractors helps prevent cost escalation.

How to Save on ADU Building Costs

We understand how costly it can be to build an ADU and why saving on building costs becomes a big part of the entire journey, so here are some actions you can take to save on it.  

1. Opt for a Smaller Size: Reduce the size of your ADU to cut costs while maintaining functionality.
2. Choose Cost-Effective Materials: Choose budget-friendly finishes such as laminate flooring instead of hardwood or composite countertops instead of granite.
3. Maximize Space Efficiency: Design your ADU layout efficiently to minimize wasted space and reduce construction costs.
4. Research Contractors: Get quotes from multiple contractors or full-service companies and choose one offering competitive rates without compromising quality.
5. Work with a full-service company: Partnering with an all-in-one company like Multitaskr can streamline the process, ensuring efficiency, quality, and cost-effectiveness throughout your ADU project.

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DIY vs. Hiring a contractor vs. Full-Service company 

If you’re trying to decide how to begin constructing an ADU on your property, you have three main options: doing it yourself (DIY), hiring a contractor, or working with a full-service company. 

Each approach has its advantages and disadvantages, so it’s vital to carefully evaluate them before deciding. Whether you’re interested in saving money, ensuring high-quality work, or having a stress-free building experience, there is an ADU-building option that is right for you.

1. DIY (Do It Yourself): Opting for the do-it-yourself approach can result in lower labor costs but entails considerable time, energy, and skill. Property owners are responsible for all aspects of the project, from acquiring necessary permits to carrying out the construction and finishing touches. DIY projects may be suitable for those with construction experience or those willing to invest time in learning new skills.

2. Hiring a Contractor: Hiring a contractor offers a balance between cost-effectiveness and convenience. With their expertise, contractors can streamline the construction process, saving homeowners time and frustration. Additionally, contractors can provide valuable recommendations and insights to ensure a project meets strict quality standards. However, relying on a contractor can be costly, and there’s a risk of miscommunication or delays if expectations aren’t clearly defined upfront. Conducting thorough research is crucial to find a reliable and trustworthy contractor.

3. Full-Service Companies: Full-service companies handle every aspect of the ADU project, from design and permitting to construction and finishing. While this option may come at a slight higher price, it offers maximum convenience and peace of mind if you want a smooth journey. You can rely on the expertise of professionals to oversee the entire process, ensuring a seamless and high-quality outcome for your unit. Additionally, full-service companies often have established relationships with suppliers and subcontractors, potentially saving time and money on materials and labor.

Whether you decide between DIY, hiring a contractor, or opting for a full-service company depends on your budget, time constraints, and your level of expertise and involvement if you wish to do it on your own. By carefully considering all the factors and researching each option thoroughly, you can choose the best approach that suits your needs and preferences.

 

Does adding an ADU increase the value of your property? 

Yes, according to the National Association of Realtors (NAR), adding an ADU to your property can increase its value by 35%. 

The impact of adding an ADU to your property can vary depending on several factors, including the location, size, and quality of the unit. However, there are numerous reasons why adding an ADU can significantly boost the value of your property. For instance, an ADU can provide an additional source of rental income and can be an excellent option for those who want to accommodate their elderly parents or adult children. Additionally, ADUs can increase the overall convenience of your property, making it more attractive to potential buyers and renters.

To know more about how ADUs can enhance your property’s value, read our article “Do ADUs Really Add Property Value?” and discover the many benefits an ADU can bring to your investment.

Multitaskr ADU in San Diego, happy client

At Multitaskr, we are fully aware of the complexities of building an ADU. That’s why our team of seasoned experts is always on standby to provide comprehensive services and solutions at every stage of your journey. Whether you’re in the conceptualization phase or the construction phase, we’ve got you covered.

We understand that your ADU is a significant investment, so we are committed to providing you with personalized attention and timely communication throughout the process. Our services are designed to ensure that your vision is brought to life and that your ADU is constructed to the highest quality and safety standards.Why wait any longer? Contact us today to schedule a FREE consultation and take the first step toward making your dream ADU a reality. We look forward to working with you!

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