Since the COVID-19 pandemic first started, the real estate market, like the rest of the world, was forced to quickly adapt. With the changes came a drastic shift in buyer priorities. As top real estate agents noted, one of the most noticeable changes was the rise in ADUs, or accessory dwelling units.
ADUs are used as separate living quarters within the main property, taking the form of renovated attics or garages, backyard guest homes, or interior conversions that serve as comfortable living quarters within the main property.
So what sparked the rise in ADUs and should you, as a potential seller, consider adding one to your premises?
How ADU Are Typically Used
According to HomeLight’s End of Year 2021 Report, the top use of ADU is to house the aging parent or grandparent of the current occupants, who feel much safer with their loved one close instead of housed in a nursing home. The next top reason is to support a financially struggling adult child of the residents.
Such living arrangements can be mutually beneficial. Those with aging parents no longer need to worry they’ll be separated by another pandemic, and parents will receive child care assistance from grandma or grandpa.
ADUs can also be used profitably. The space can be rented out to short-term renters on vacation or long-term renters willing to sign a monthly lease. These can be great sources of extra income.
Types Of ADU And Necessary Amenities
The most common type of ADU, cited by top real estate agents, is the detached ADU. This means there are no shared walls with the property, which makes sense as the top feature for any ADU is a private entrance.
After the detached ADU, real estate agents claim the attached ADU, which shares at least one wall with the property, is the second most common type, followed by an interior or garage conversion.
Remember, ADUs should serve as comfortable living quarters, and the top amenities you should consider in your ADU are in-unit laundry machines, air conditioning, and wireless internet.
The Added Value Of An ADU To Your Property
The value of an ADU has risen significantly since pre-COVID times given their increased use for multi-generational families. Before the pandemic, an ADU was valued at about $47,497. Currently, the value for an ADU is about $65,908 nationally. This denotes a 38% increase.
Depending on your region, this increase is even more or less significant. For instance, ADUs have increased in value the most in the Midwest with a jump of 54%, however, they are valued the most in the Pacific, where average ADUs are worth about $116,931.
Nationally, the cost of building an ADU comes to around $77,239. While this would result in a negative ROI, depending on the region an owner could see a significant gain when it comes time to sell. Clearly, ADUs add value to your home, and many like the idea of building one to increase their home’s marketability. Homeowners, especially those wanting to sell their property for the most value, should consider the costs that go into building one before doing so purely for investment purposes.
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