Building an ADU above a detached garage in Fairfield County Connecticut

[Chloe Smith]

I live in a town in Fairfield County Connecticut that has very high home values. My primary residence is on a 1/4 acre lot and has a detached garage that is very private from the main house. I checked with the town and we are within the setback requirements to build above the garage. The garage is very old and will need to be taken down so the garage/ADU will be new construction. We will also need to tap into the city sewer system which will be very costly. I'm waiting on a builder's estimate and am looking to find 2 more builders in the area for quotes. We will use the HELOC we have in place to finance the project. There are not many ADU's in my town so the comps are hard to find but there is one that is the same size as we are considering and is renting for $3,500 per month. Construction is very expensive near me so I want to make sure I do not overspend. I'm estimating around $250k. Thoughts on that estimate? I think the ADU will add decent equity to the property since everyone seems to be looking for space for elderly parents or just a separate area to work and/or play. Long term we might live in the ADU and travel regularly and rent out the main house for 3x the amount. While this all sounds like a great plan, we've never done anything like this before so it's nerve-wracking to think about making such a large investment using our HELOC. What else are we not thinking about?