ADU/in-law unit in Newark, Bay area

[Harish Maiya]

Howdy BP folks, 

I am firstimer, please bear my lengthy writeup.
Need some inputs for deciding to build ADU unit in side yard of my house.

Situation: Have a day job along with a kid. Cannot spend full time on the project. First time house buyer. 

My homework so far: 

Construction:

600 sqft allowed in my lot in Newark. Recent state laws have eased prices for utilities, approval processes. 

Tiring part is with contractors; finding one for small projects, timely completion and extra costs. Typical quotes are $250 to $350+ per sqft. which would make project about $200K in total. Prefab homes upon additions (redesign for approval, amenities) would come close to $120K+ they are not guaranteed/proven yet. So i think better to go with traditional build up.

Finance:

With 50K in hand, I would need financing for $150K. with mortgage (20yrs), EMI comes to about 1.1K per month.

Typical rent is around $1800/month. accounting maintenance, tax, occupancy rate. there would be avg gain of $500/month.

My concerns: 

Appraisal/Sell ability of main property after ADU.

Is time/effort in construction worth the effort? Is it better off with 50K invested elsewhere (ETFs/stocks)

Can I buy another property for 250K elsewhere and get slightly lower returns.

It would be great for me if you can provide inputs on any of these points, raise flags, suggestions.

Thanks in advance.

[Amit M.]

I'd start talking to local realtors to get a sense if an ADU is seen as a plus for resale purposes. Especially in a suburban setting. On one hand you have an extra unit, for rental or extended family uses, which would be seen as a plus. OTOH most people just want an SFH and don't need/want an extra unit to deal with. (You'd also want to compare the value of adding 600 sq ft extension to the home vs an ADU.) Experienced realtors in your are can help you get an answer on that. Remember, it's an opinion, so I'd seek many perspectives, and see if you can draw a conclusion. I can tell you that in San Francisco proper, ADUs are generally seen as a plus, but the built environment here is much more dense. Suburban buyers may see it differently.

Let us know what info you get on this!