What is an Accessory Dwelling Unit (ADU) & Why Are People Building Them For Their Homes?

 

What is an Accessory Dwelling Unit (ADU)?

& Why are People Building Them for their Homes...

The Accessory Dwelling Unit is actually an older concept that has been making a major comeback as of late. Think: Above-the-garage suite or basement apartment. It could even be a tiny home built on your same property. Some of the more trendy names currently are the she-shed (made famous by the State Farm Commercial - contact our friend agent Collin Doyle for a quote),  man cave or the granny flat. No matter what you choose to call it, they're becoming increasingly popular. The mortgage professionals at Goldwater Bank have shared some insight with facts about ADUs and why our borrowers want them. 

What is an ADU?

• An accessory dwelling unit is a secondary house or apartment that shares the building lot of a larger, primary house.
• An Accessory Dwelling Unit cannot be sold separately from the primary home. Any sale or transfer of the primary unit would include the ADU

Why are people building ADUs? 

• If done properly, an Accessory Dwelling Unit can increase your property value by up to 20 - 35% 
• ADU can become a source of income if you plan to rent it out 
• The cost of building an ADU may be tax deductible, and may be able to depreciate the value all at once - speak to your CPA for more info on that. 
• ADUs are a great way to keep extended family nearby while still maintaining privacy. They can be great when considering space for an in-law suite

Speak to a Loan Officer at Goldwater Bank, Mortgage Division to find out your options for financing an Accessory Dwelling Unit. Many of our borrowers are able to use the positive equity in their home to finance their ADU with a cash-out refinance with absolutely no out-of-pocket expense to them. Find out the best option for you and your ADU goals. At Goldwater Bank, our preapprovals are as good as gold.