ADU vs Foundational Tiny Home

[Andrew Key]

Hi all,

I'm an investor in Winston-Salem NC. My family owns a plot of land with a rental house (that my brother rents out). The land total is .8 acres and I've subdivided it for a total of three tracts. Our initial idea was to build-to-rent two 1,300 sqft homes on the additional tracts of land, but after speaking with lenders, the current interest rates made this unfeasible. We are now going to build-to-sell on the largest tract (.35 acres).

My question pertains to the final tract of land. It is situated directly behind my brother's rental and is .22 acres. I've had the idea to either equip the tract with a foundational tiny home, reverse the subdivision and build an ADU, or just build a smaller home on the currently subdivided lot. My brother's rental is a little over 1,000s sqft heated living area, so the ADU would only be permitted for 500 sqft in Winston-Salem, according to information I found online .

One advantage of an ADU I believe would be the ability to hook up to the primary residence's utilities. Does anyone have any knowledge/experience in investing in foundational tiny homes vs. ADUs? Is one more attractive than the other to potential tenants? Is one more beneficial to an investor/landlord than the other? What other issues/roadblocks may I face that I am not aware of?

I've reached out to the City of Winston-Salem to gain more information on tiny house regulations since there was not much to be found online.

Thanks!

Andrew