How to build an Accessory Dwelling Unit for Less than $10k: Add an Add

Now it may not cost you less than 10k but for a small cost to build an ADU can earn you an entire fortune.

Finding the right people to help you complete each stage of your project is vital. Costs can vary greatly but if you consider yourself a handy and resourceful person you will save a lot of money on your ADU build-out.

Consider where you can focus your energy to get that accessory dwelling unit completed on time and under budget.

If your number one objective is rental income…You don’t need to go with all the high-end finishes and the newest appliances.

You aren’t building your dream home. You are building something that someone would enjoy living in. Nothing wrong with finding used appliances and discounted products to save you costs.

You don’t need to include a top-of-the-line fridge, microwave, dishwasher, laundry machines, and other luxuries. Think about how you can create a functional living space but also consider what your potential tenants would value.

Would they pay more for onsite laundry access? More for a full kitchen with new appliances?

Consider what your market is offering so you can match or stand out as needed.

Type of materials and where you source them can vary greatly. Not every contractor has the time to shop around and find you the best pricing. Sourcing material takes time and to drive down costs this is where you can step in.

You can build an ADU for less than the price of a car.

DISCLAIMER: If you are building from the ground up costs will increase dramatically. You are basically building a house from scratch. That’s going to cost you way more than 10k.

NOW, if you want to build an ADU quickly and on the cheap then a garage conversion is your best bet.

Start with a garage conversion.

Turn that wasted storage or parking space into a living space.

To do so it needs to have plumbing and electrical hookups already in place.

Adding a full bathroom and kitchen will be your biggest cost.

Depending on how nice you want it to look, consider where you will be purchasing your appliances and what kind you absolutely need.

A bathroom needs a toilet, shower and sink.

A kitchen requires only a cooktop.

Finding cabinets, countertops and other amenities will be where the task of keeping costs low becomes difficult. Not impossible.

Consider your scope of work. What do you absolutely need to have and start sourcing that material or tradesman.

What about city fees? Nice thing is that most jurisdictions charge little to no fees for ADUs. Ask your local planning department for a fee breakdown of your proposed ADU for exact numbers.

NO Impact fees but other fees for submission pay apply. In Fact, state law prohibits them from charging many of the traditional fees most new developments are required to pay.

Once the permitting is taken care of. You just need to focus on the inside of the garage. Start looking up inspiration online.

Everything depends on who does the work. Don’t go with the cheapest solution, rather good quality work. You may be able to do many of these things yourself.

The BEST way to lower construction costs is to keep the scope of work small.

You can easily convert a garage and create an ADU for less than 10k. Spend more where you need to. Shop around for the best solution. Depending on how much time and energy you put into the project itself. Will impacts cost the most.

The nice thing with a garage conversion is you don’t need an architect, designer, civil engineer, or large construction team. With a few quality tradesmen and some good old fashion sweat equity, you can complete this project cheaply and quickly.

Because you did the math you can weigh financial decisions more effectively.

As with every construction project, change orders happen and costs rarely stay as expected. But since you did the math on how much money this ADU will make you. Going over budget is not the end all be all.

Think about this…

Even if it cost you 25k to build. It rents for $1000 a month. 2 years and 1 month later you made all your money back.

That’s if you didn’t refinance your house sooner. Because you forced appreciation into your property by adding an ADU. Theoretically, you can do a cash-out refinance once the ADU build-out is complete and recoup your entire investment plus more.

How many times could you follow this simple process of converting a garage into an additional living space?

Turning your single-family home into a small apartment building.

How many small apartment buildings would you need to escape your day job and become a full-time real estate investor?

Now I don’t personally recommend rushing to hand in your resignation right away. Your w-2 income gives you great benefits. Such as the ability to use leverage through a mortgage to do it over and over again.