Where to start?
First, accept there is a process from thinking about an ADU to having an ADU.
Below are steps to help guide you along the way.
ADU Development Process Steps
The process for building an ADU typically follows this workflow:
Zoning and Public Works – Check with your local planning department to determine if an ADU is allowed on your property. Get a handle on the land-use permitting rules! What are the ADU size limits, building setbacks, and fees? You should also visit with public works and building codes staff. Will you need new utility service lines, or can you use the existing ones? Will system development charges or fees be applied?
Set Project Goals – Familiarize yourself with different ADU types. These include attached or detached; new construction, interior conversion, addition, and garage conversion; stick built, modular, or pre-manufactured. Consider who will live in the ADU. What are your short- and long-term housing needs? How much privacy do you prefer? How much can you afford? Do you want to use the ADU to generate income?
Design – If you plan to construct a custom ADU, start by interviewing architects or designers. Or review a pre-designed plan. Next, interview licensed general contractors or builders. Note: Some firms offer design and construction services (aka design-build). To increase resilience, ask your designer to consider energy efficiency options and building materials that are appropriate for the hazards in your region.
Costs and Financing – Ask your contractor or modular ADU provider to prepare a detailed cost estimate. Project costs will vary depending on ADU type. Typically, 80% of the total project costs are for construction. The remaining 20% covers consulting, design, and permitting fees. Once you know the costs, obtain financing. This could be owner cash, a home equity line of credit, a second mortgage, refinance, or grant.
Permitting – Obtain required land-use approvals and building permits. Your designer or contractor should be able to assist with this. NOTE: Make sure you understand how long the permit processes will take prior to initiating your ADU project. Account for potential permitting delays in your cost estimate. If your jurisdiction has pre-approved ADU plans, they may be able to save you both time and money. Ask lots of questions!
Construction – Realize your dream! Sign a construction contract and establish a project construction schedule. Ensure you are listed on your contractor’s certificate of insurance. Consider purchasing construction or builder’s risk insurance. Break ground! Construct your ADU, monitor costs and construction schedule, and track any liens or lien waivers. Complete construction and obtain a certificate of occupancy.
Management and Ongoing Maintenance – Manage your ADU in accordance with local rules and regulations. Set up a business structure and get advice from an accountant or tax preparer as needed. Consider liability risks and obtain appropriate insurance coverage. Familiarize yourself with Fair Housing laws. You might consider employing a property management company. Care for and maintain your investment!