Coach house garage vs regular garage w basement for an ADU

[Svend W.]

Hi all

I'm househacking a two-flat home in northern Chicago (Evanston). I know I want to add an ADU, either in the basement or the back yard.

Since parking is a bit sparse on our one-way street and we use the driveway, I think in any case we will to build a garage to attract the kind of tenants we're targeting. I'm considering idea of biting the bullet and building a coach house with a garage.

Our basement is finished and has 2 BR (currently a half-bath, no kitchen), so that could be converted.

So, I think the choice would be between a 1) coach house w garage or 2) a regular garage + converted basement. 

I'm curious if anyone has any thoughts on the pros and cons of one over the other--my assumption is that you can't do both--in this market. The coach house would be considerably more expensive (I think the estimate I got was as much as $200K), though it would also have some obvious advantages to prospective tenants.

Thanks in advance.

[Jonathan Satizabal]

I would estimate the cost of a garage/ADU at 150k-200k. I don't know if it is worth it from a investment stand point. It my pay off with an added appraised value down the line. I would ask if the ADU would increase the value of your property by at least 200k? I thought I read that rents were going to be capped for ADU's in Chicago at about 1200 a month or only some ADU's would be approved only as affordable rental units based on an area's median income. In Chicago they cannot be used as short term rentals or Airbnb's. I'm not sure what Evanston is doing.

If you are looking at it as an investment, I would say take your 150k to 200k and invest it somewhere else you will probably get a better return with less work and less risk. I think the best ROI for an ADU is in a basement or attic unit. If you have a large property maybe look into a prebuilt or modular home that you can just drop on your land, or if you are handy you can build one yourself.