ADU Calculator
Calculate build cost, rental income, payback period, and full 10-year ROI for your accessory dwelling unit. Compare garage conversion, basement, and detached builds — and see which financing option saves you the most.
Side-by-side comparison of all ADU types for your 400 sqft unit with $1,500/mo rent on a $450,000 home.
| Type | Build Cost | Timeline | Value Added | Net Equity | Gross ROI | Payback |
|---|---|---|---|---|---|---|
| Garage Conversion | $64,000 | 3-6 months | $81,000 | +$17,000 | 26.7% | 3.7 yrs |
| Basement Conversion | $60,000 | 3-6 months | $67,500 | +$7,500 | 28.5% | 3.5 yrs |
| Attached Addition | $88,000 | 6-12 months | $99,000 | +$11,000 | 19.4% | 5.1 yrs |
| Detached New Build | $116,000 | 9-18 months | $126,000 | +$10,000 | 14.7% | 6.8 yrs |
| Year | Annual Rent | Net Rent Income | Cumulative Rent | ADU Value Added | Cash-on-Cash |
|---|---|---|---|---|---|
| 1 | $17,100 | $8,337 | $15,900 | $83,835 | 10.8% |
| 2 | $17,613 | $8,850 | $32,313 | $86,769 | 11.5% |
| 3 | $18,141 | $9,379 | $49,254 | $89,806 | 12.2% |
| 4 | $18,686 | $9,923 | $66,740 | $92,949 | 12.9% |
| 5 | $19,246 | $10,483 | $84,786 | $96,203 | 13.6% |
| 6 | $19,824 | $11,061 | $103,410 | $99,570 | 14.4% |
| 7 | $20,418 | $11,655 | $122,628 | $103,055 | 15.1% |
| 8 | $21,031 | $12,268 | $142,459 | $106,662 | 15.9% |
| 9 | $21,662 | $12,899 | $162,921 | $110,395 | 16.8% |
| 10 | $22,312 | $13,549 | $184,032 | $114,258 | 17.6% |
What Is an Accessory Dwelling Unit (ADU)?
An ADU (also called a granny flat, in-law suite, backyard cottage, or secondary suite) is a second, self-contained residential unit on the same lot as a primary home. ADUs have their own entrance, kitchen, bathroom, and sleeping area. They can be attached to the main house, inside it (basement), or built as a separate structure.
Why Build an ADU?
Rental income: The most common motivation. A $1,500/month ADU generates $18,000/year — often enough to cover a significant portion of your mortgage payment.
Multigenerational living: House aging parents or adult children while maintaining independence and privacy for everyone.
Home value increase: ADUs typically increase property values by 15-28%, often more than the build cost in appreciating markets.
Housing flexibility: If your needs change, rent it out, house family, or use it as a home office or studio.
ADU Cost & ROI Formula
Annual Rental Income = Monthly Rent × 12 × (1 − Vacancy Rate %)
Simple Payback (years) = Total Build Cost ÷ Annual Rental Income
Gross ROI = Annual Rental Income ÷ Total Build Cost × 100%
Net Equity Gain = Home Value × ADU Value-Add % − Total Build Cost
The true ROI combines both streams: rental income over time AND the immediate increase in home value. A detached ADU often adds 25-28% to home value — on a $500,000 home, that's $125,000+ in added value vs. a build cost of $100,000-$150,000.
Example: Garage Conversion in Los Angeles
400 sq ft Garage Conversion | $160/sqft | $1,800/mo rent
| Build Cost | $64,000 |
| Permit + Impact Fees | $12,000 |
| Total Project Cost | $76,000 |
| Monthly Rent | $1,800 |
| Annual Income (5% vacancy) | $20,520 |
| Simple Payback | 3.7 years |
| Gross ROI | 27% |
| Home Value Before ($750K) | $750,000 |
| ADU Value Added (18%) | $135,000 |
| Net Equity Gain | +$59,000 |
This is a common scenario in high-cost California markets where rental demand is strong and garage conversions are permitted by right under state ADU law (AB 68, SB 9).