Adding an adu

[Janani Rangaraj]

I am considering adding a small studio (attached junior adu) of about 264 sq feet to my home in San Jose. The intention is to rent the studio. The total cost of construction including permit and finishing would come around 185k. The rent potential is 1200$-1500$/month. From cash flow point, not sure if it would make much sense to invest 180k to have an income of may be 900$/ month (that is if we dont use loan). So, would like to get into this only if i think would add good equity. I read ADUs are valued at lesser $ per sq feet than main house. Mine would be attached ADU and easy to add access from main home. Any inputs from realtors in bay area/San Jose, how much value ADU adds to the home?

[Jacob Sherman]

an independent subject to appraisal would be a good tool to use for the analysis