Renters pay for location, square footage, and basic amenities relative to what they have to spend.

When a property based on square footage has a substantial amount in the OZ as compared to that outside the OZ and it is contiguous, then it's all in the OZ.

Here is a tip that may  work for you ------- THE 50 HOUSE RULE: Make it a project to look 50 houses, with a self pledge NOT TO buy or make an offer on any of them - your objective is to study the market, keep a journal - in it list every property you look at, the square footage, the price per SF, the agents' listing, any comments the agent or the seller makes, keep good notes -After awhile you will discover some very interesting things about this project, 1. you will become aware of values, 2. you will learn how to detect motivation of sellers and agents and 3. this journal will be a valuable asset when you are more aware of the market and you will be able, after you are a little more educated, be able to make intelligent offers that will pay off in equity or cash profits.

The house next door is same square footage BUT has one more bedroom and I think that adds a lot more value to the house.

Personally, I do not see the square footage of an ADU added to the square footage or bed/bath count of the main structure because this is not part of the main living structure.

I also can write off some of my homes square footage as a home office and if the photography business loses money (which it will on purpose for the first couple of years) I can write the loss off of my W-2 taxable income.I am not saying that you need to go get a W-2 job but you should re-evaluate your business and what it is really making or paying for. 

One starting point may even be to make sure they have the right square footage and condition information.

Property values in general have increased which is part of this, but this ADU added a significant amount of living sq. footage to the property which was the main reason for the increased valuation.

Tonight a neighbor showed us video footage of our tenants daughter defacing the cement. 

How much are single family homes in the area with the same square footage?