Maximizing Your ADU Budget: Download Our Free ADU Budget Worksheet Today

If you are considering building an Accessory Dwelling Unit (ADU) but feeling overwhelmed by the costs involved, we sympathize. ADUs are significant investments even though they are small houses. There is also a lot of misleading information out there on ADU Facebook Groups, ADU blogs, and other sources. Budgeting for an ADU project can be a daunting task, and can get complicated, which is why we have created a comprehensive ADU Budget Worksheet to help you plan effectively and maximize your budget.

Why You Need an ADU Budget Worksheet

Your ADU project's budget is crucial to ensure that you stay on track and avoid financial surprises along the way. Planning early and accurately can help you save costs and avoid mistakes on your ADU build. Our ADU Budget Worksheet is designed to assist you in estimating costs accurately, identifying potential expenses, and helping you make informed decisions throughout the construction process. It is a guide that you can use early on in the planning process, but also set up to help you track the actual costs and compare them against your budget throughout the ADU design and construction process.

What Does Our ADU Budget Worksheet Offer?

Our free ADU Budget Worksheet includes detailed sections for all aspects of your ADU project budget, such as:

• Construction Costs: Estimate expenses for materials, labor, permits, and more.

• Design and Planning Fees: Include costs for architectural plans, engineering, and other design-related expenses.

• Utility Connections: Budget for water, electricity, and gas connections.

• Interior Finishes: Plan for flooring, fixtures, appliances, and other interior design elements.

• Exterior Finishes: Estimate costs for siding, roofing, landscaping, and other exterior finishes.

• Contingency Fund: Allocate a percentage of your budget for unforeseen expenses.

How to Download Our Free ADU Budget Worksheet

Getting your hands on our ADU Budget Worksheet is easy! Simply click the download link to the right to access this essential tool for your ADU project. Take the first step towards a well-planned and budget-friendly ADU construction process today.

Don't let financial concerns hold you back from realizing your ADU dream. Download our free ADU Budget Worksheet now and pave the way for a successful and cost-effective ADU project. Download now and start building your dream ADU with confidence!

Remember, proper budgeting is the key to a stress-free ADU construction experience. Let our ADU Budget Worksheet be your guide as you embark on this exciting journey.

Your ADU budget worksheet is filled out and you are ready for the next steps?

There are a few ways you can move your project forward after you work through the budget. You can hire a designer to help develop a custom designed ADU, purchase a pre-designed ADU plan, or talk to an ADU expert to discuss your ideas and develop a plan. Luckily Modern ADU Plans offers all of these options to help homeowners like you achieve your ADU goals.

There are three convenient buttons on the right side of this blog, each one offering you a way to take the next step towards your ADU.

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Next Steps for your ADU Project:

Your Guide to Hiring a General Contractor for Your ADU Project

Building an Accessory Dwelling Unit (ADU) can be an exciting way to add living space, generate rental income, or create a home for aging family members. But navigating the construction process can feel daunting, especially when it comes to finding the right general contractor (GC). This crucial decision will significantly impact your project's success, so careful consideration is essential.

This guide equips you, the homeowner, with the knowledge and steps to confidently find a general contractor who aligns with your vision, budget, and timeline for your ADU project.

Pre-Contractor Prep: Setting Yourself Up for Success

Before diving headfirst into contractor searches, some groundwork on your end will streamline the process and empower you to ask informed questions during interviews.

• Solidify Your ADU Vision: Do you already have a design complete or have a specific design idea in mind? Typically a GC will want to see a rough design to be able to respond to. Think about the form of the ADU, its size, functionality (studio, one-bedroom, etc.), and any special features you desire. These all will affect the cost to build and the complexity of the construction process. Having a basic layout complete or browsing online inspiration boards like Pinterest or Houzz can be helpful. Or rely on drawings and images from your designer to set the direction.

• Know Your Local Regulations: Building codes and permitting processes vary by municipality. Research your local ADU regulations to understand feasibility and potential limitations. This knowledge will equip you to discuss the project's regulatory framework with potential contractors. Again, it is probably best to have a designer on board as you do this prep work prior to beginning your search for the ideal builder.

• Establish a Realistic Budget: Research average ADU construction costs in your area. Consider not just the build itself, but also architectural plans, permitting fees, and potential utility upgrades. A realistic budget will guide your contractor selection and keep your project on track financially. It is also best to not just use cost per square foot calculations that you find on the internet. They are rarely accurate and very misleading. Instead ask around and find total project costs for similar projects. Walk around your neighborhood and find properties that have ADUs and ask their owners what the total project cost was. This will be the best way to get some accurate information. Your design team should also be a great resource to share information on construction costs of similar project.

Finding Your Contractor: Where to Look and How to Narrow Down Options

• Talk to Your Designer: chance are you hired a design team because they have some experience on similar projects. Leverage that experience by asking them to recommend contractors they have worked with in the past that have successfully completed projects on time and on budget. The design team will probably have a handful of go-to contractors they like working with and would recommend for your project.

• Leverage Your Network: Talk to friends, family, and neighbors who have built ADUs. Personal recommendations are a goldmine, offering valuable insights into contractor performance and potential red flags. Ask them about the outcomes, the communication style, what happened when there were bumps in the road. This sort of insight will be a great way to assess if a contractor is worth interviewing for your ADU project.

• Online Directories and Review Platforms: Websites like Houzz, the National Association of Home Builders (NAHB), and the Better Business Bureau (BBB) allow you to search for licensed contractors in your area and view customer reviews. There are probably local directories in your area as well. Read reviews, peruse company portfolios and select the companies that have worked on similar projects and share your values.

• Specialty ADU Contractors: Consider companies specializing in ADU construction. Their experience with ADU-specific regulations and construction techniques can be invaluable and help avoid costly mistakes.

Qualifying Potential Contractors: The Interview Process

Once you have a shortlist of potential contractors, it's time for background research and in-depth interviews. Here's how to effectively assess each candidate:

• Licensing and Insurance: Verify the contractor holds a valid license in your state and has adequate general liability and worker's compensation insurance. Ask for copies of these documents. Check with the National Association of Home Builders (NAHB), and the Better Business Bureau (BBB) to verify the information and see if there are any complaints or legal issues with the company.

• Experience with ADUs: While general construction experience is valuable, prioritize contractors with a proven track record of successful ADU projects. Ask to see examples of their past work, ideally in your area and with similar ADU styles.

• Communication Style: A comfortable working relationship is key. You will be working with this team for many months in a stressful environment. Assess the contractor's communication style during the interview. Are they responsive, clear, and patient with your questions? Ask to speak with the project manager or any team member that will be leading the project if it won’t be the business owner or person you interview during the selection process.

• Project Timeline and Budget: Discuss your ADU vision, budget, and desired timeline with each contractor. Get detailed quotes outlining the scope of work, materials, and projected costs. There will be more about how to compare bids below. Be wary of quotes significantly lower than the average – they could indicate cutting corners or missing items that will be added later.

• References: Request a list of references from previous clients. Contact these individuals to get firsthand accounts of the contractor's work ethic, communication, and problem-solving skills. Ideally these references are people who built similar types of projects.

Beyond the Interview: Additional Considerations

• The Contract: Before signing any agreements, have a lawyer review the contract. The contract should clearly outline the project scope, timeline, budget, payment schedule, and change order procedures. Don't hesitate to ask questions and ensure you are comfortable with all the terms before signing.

• Permits and Inspections: Inquire about the contractor's experience navigating the ADU permitting process in your area. Although your design team may be leading this process, or perhaps you are taking it on to save costs, there will be times when the contractor may get involved. Working with a an experience team can help navigate the complexities of permit review and save time.

• Dispute Resolution: The contract should outline a clear process for resolving any potential disputes during construction.

Building Trust and a Strong Partnership

Finding the right general contractor is an investment in the success of your ADU project. By thoroughly vetting candidates and prioritizing clear communication, you can build a strong partnership with your GC and navigate the construction process with confidence.

Bids

When you ask GCs that you are interviewing for estimates or bids for the project, you will not be getting them in a standardized format. Each construction company handles bids differently. Your job as the homeowner is to review the bids when they come in and develop a process to interpret them so you can compare apples-to-apples. If you are unsure how to do this, ask your design team to help.

Often this means setting up your own spreadsheet or document and reorganizing the numbers you get from the builders so it is easier to compare across companies. The goal is to not just look at the total cost at the bottom of the bid, but to look at each line item to see if there are any outliers or red flags that need a more thorough review.

For example, if one company has the window package at $30,000 and another only shows it at $10,000 that is red flag. You will want to ask more questions of those companies to clarify how they calculated their numbers to make sure they didn’t make a mistake.

By understanding how a company calculated their costs you can build trust with that team. This also means that you don’t always want to go with the lowest bid. The lowest bid might mean they are missing items, didn’t take the full cost into consideration, and may have a lot of costly change orders throughout the project.

In fact, we rarely recommend hiring the cheapest builder.

Specific Questions to Ask As You Interview Builders:

How big is your team?
The size of the General Contractor’s company can shine a light on their resources, capacity, and organization. Often a larger company would have a dedicated project manager to lead your project, may be able to handle more complex projects, and may have in-house teams perform some of the work rather than subbing it out to other companies.

That doesn’t mean bigger companies are better for your project though. Small contractors offer some advantages as well. You might be working directly with the company owner, getting a more personalized service. Or they may be more affordable with less overhead expenses.

How many projects of a similar type and scale have you done recently?
You don’t want to hire a company that works on large multi-million dollar estates, or commercial buildings, to build a small ADU project. Their team won’t have the right experience. You want someone familiar with the type of project you are building so they can bring lessons learned from other projects to your build.

How many recently completed projects have come in on or under budget?
You want someone who has a track record of managing the construction budget. No one likes cost overruns or being surprised part way through the build with expensive change orders or requests for additional payments. Ask for case studies showing they can keep your project on budget. The answers to this question should reflect the companies ability to manage their team, the schedule, and the execution of the project.

How many recent projects have come in over budget?
You want to know if projects have come in over budget and then ask why. There are many reasons a project may go over, and it isn’t always the contractor’s fault. Maybe a client changed something, or material costs went up unexpectedly, or something was discovered during excavation that affected the project. The point is you want to learn why budget overruns happened and how the builder handled these situations.

Who will be the day-to-day contact?
Often there will be a project manager or site superintendent that will be your day to day contact on site throughout the project. You need to know who this person will be and make sure you can build a strong report with this individual. Their communication process will be key to the success of the project. They will also be in charge of managing all the various aspects of your project and the quality of their management skills is vitally important.

Bonus Tip:

Throughout the construction process, maintain open communication with your contractor and the design team. Schedule regular meetings - often called OAC (Owner, Architect, Contractor) meetings - to discuss progress, address any concerns promptly, and ensure the project aligns with your vision. And remember, it is always cheaper to make changes or work through problems on paper rather than in the field when things are getting built. Don’t cheap out by not engaging your design team to assist during the construction phase. They can save thousands of dollars and lots of time by helping answer questions, clarifying details, and troubleshooting the inevitable challenges along the way.

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Next Steps for Your ADU

As discussed above, it is best to have a design in place as you begin your search to a builder to construct your ADU project. This is why starting with one of our pre-designed ADU plans can help you kickstart your project and save significant time. Take a look at our collection of modern ADU designs and find the layout that best suits your project goals and property.

Myth Busting the Owner-Builder Approach for ADU Projects

When considering an Accessory Dwelling Unit (ADU) project, one of the critical decisions you'll face is whether to take the path of an owner-build or entrust the project to experienced professionals. While owner-building might seem like a cost-saving venture at first glance, this article aims to shed light on the fact that the often-illusory savings in dollars come at the substantial cost of time, stress, and potential pitfalls. As an advocate for well-executed ADU projects, I'll discuss the pros and cons of owner-building, ultimately making a compelling case for the investment in hiring experts to guide your ADU journey.

The Pros of Owner-Building an ADU:

• Perceived Cost Savings: The primary allure of owner-building is the perception of cost savings. Some homeowners believe that by cutting out the professionals and managing the project themselves, they can reduce overall expenses. We have heard people say they saved 20% of the total construction cost, or even thrown out numbers like $100,000 in savings.

The Cons of Owner-Building:

• Hidden Costs and Errors: Unfortunately, the reality of owner-building often diverges from the dream. Inexperience can lead to costly errors, mismanagement, and rework. Poorly executed projects can end up costing more in the long run when considering lifecycle costs. A slower scheduled impacts your ability to generate revenue if the ADU will be a rental unit. Missing regulatory requirements can cost a lot of money in redoing work or addressing potential future fines.

• Time-Consuming: ADU projects are complex, requiring extensive time and effort for planning, permitting, subcontractor coordination, and construction. Owner-building often results in significant time commitments that can disrupt your daily life and add stress. If you have a full time job, your time is much better spent earning money with your expertise and hiring an experienced builder to lead your ADU project. Trust me, as I get older I understand that nothing is as valuable as my time and anything I can do to invest in time savings is worth it so I can spent more of my personal time with family and friends, doing the things I love.

• Regulatory Challenges: Navigating local regulations, zoning codes, and building permits can be daunting without professional guidance. Mistakes in this area can lead to project delays and potential fines. They also could lead to legal issues in the future if you don’t meet code requirements. This can add a big risk to your investment.

• Risk: When you build the project yourself you are liable for all mistakes and potential outcomes. If someone gets injured because something isn’t to code or a safety requirement isn’t met on the job site you can be sued. If you order materials and the wrong ones are delivered or they are defective, you can be on the hook for that sunk cost. You don’t have insurance or other financial protections like a general contractor does so you are taking on significant financial risk.

Why You Should Hire Experts:

1. Expertise and Efficiency: Experienced ADU designers and general contractors bring a wealth of knowledge and expertise to ADU projects. They can streamline the process, ensuring that everything is done correctly and efficiently from the start, saving both time and money in the long run. Even though ADUs are small and seem simple, an experienced team is well worth the investment.

2. Customization: Professionals work with you to create a design that suits your unique needs and preferences. They understand local regulations and can design an ADU that complies with zoning requirements while maximizing its potential. They can give you advise on ideal layouts, quality materials and systems, and actually save you money by considering things like sustainable features, lifecycle costs, and passive energy saving strategies.

3. Quality Assurance: With experienced professionals, you can expect a high standard of workmanship, reducing the risk of costly mistakes and rework. This not only saves money but ensures a durable and aesthetically pleasing ADU. Contractors are liable for their work and carry insurance policies to protect them and you from costly mistakes and legal situations.

4. Time Savings: ADU projects can be time-consuming and stressful, especially when managed by an inexperienced owner-builder. Professionals handle the details, timelines, and coordination, allowing you to focus on your daily life without undue disruption. They also have relationships with subcontractors, material suppliers, and others to get your ADU project completed in fewer months. This means you can start renting your ADU quicker and start generating income. Remember, every month of delay can cost you thousands of dollars in lost rent.

5. Compliance and Permits: Experienced architects and contractors understand the regulatory landscape, ensuring your project is compliant with local codes and obtains the necessary permits. This eliminates the risk of project delays and costly legal issues.

Conclusion:

In the realm of ADU projects, owner-building might appear to be a cost-saving strategy. However, the hidden costs in terms of time, errors, and stress often outweigh any potential financial savings and often lead to projects that end up costing the same or more. Investing in the expertise of experienced designers and general contractors is the wise path for all ADU projects. Their knowledge, efficiency, and commitment to quality not only save you money in the long run but also ensure your ADU is a valuable and functional addition to your property. Don't let the allure of immediate savings cloud your judgment; opt for the experts, and your ADU project will thank you for it.

Your ADU is an investment and taking shortcuts or trying to save a dollar at the expense of quality is never recommended.

If you were considering doing an Owner-Build ADU project and have questions, don’t hesitate to reach out and tell us about your project.

What Should Design Fees Be For A Custom Designed ADU?

There is a lot of misinformation out there regarding what is an appropriate design cost for ADU Projects. Hopefully this post will help cover some aspects of this debate so you can better budget for your project.

When embarking on an Accessory Dwelling Unit (ADU) project, one of the critical decisions you'll face is determining the appropriate design fees for professionals to help you with your project. As an experienced ADU designer, I've had the privilege of working on numerous ADU projects across the country, and I firmly believe that investing in professional design services is the cornerstone of a successful outcome.

In this article, I'll provide a comprehensive perspective on design fees, focusing on why allocating 10-15% of your project budget to these services is not only reasonable but often a prudent investment in your ADU project.

If you read forums or facebook posts asking about ADU design fees and people are saying that $10,000 or more is expensive be very skeptical. If you are paying below $10,000 for designer services I would be very nervous about the quality of work you are getting or the experience level of the designer. Yes, there are designers out there willing to work for cheap prices, but you will also be getting cheap service. Remember, you get what you pay for.

1. The Value of Professional Expertise:

Architects and experienced ADU designers bring a wealth of expertise to ADU projects. From understanding local building codes and regulations to creating sustainable, efficient and aesthetically pleasing designs, our knowledge is invaluable.

ADUs require careful planning to maximize space, ensure structural integrity, and meet safety standards. By allocating an appropriate percentage of your budget to design fees, you're not just paying for drawings; you're investing in the peace of mind that comes with knowing your project is in capable hands. You are making an investment. And like other investments it will pay off in the long run.

2. Tailored Solutions for Your Needs:

Quality designers don’t provide one-size-fits-all solutions. Instead, we build expertise in particular project types over years of studying, and practicing. We then work closely with you to understand your unique needs, preferences, and vision for your ADU, and draw on our experience to deliver a high quality design.

The design process is a collaborative effort, where your input is integrated into every decision, ensuring that the final product aligns with your goals and the specifics of your property. The level of customization and attention to detail that an architect or experienced designer can provide justifies the fees associated with their services.

3. Navigating Regulatory Challenges:

Local regulations, zoning requirements, climate variables, site conditions, and building codes can be complex and vary significantly from one property to another. Experienced designers are well-equipped to navigate this maze.

By working with a professional, you reduce the risk of costly mistakes, delays, or design revisions that may result from non-compliance. This ensures your project proceeds more smoothly, saving both time and money in the long run. And even when a designer runs up against regulatory hurdles, they know how to research codes, talk with staff at the building department, and negotiate their way through the approval process.

4. Maximizing Your Investment:

A well-designed ADU can significantly increase your property's value. By allocating 10-15% of your project budget to design fees, you're not just paying for the design itself; you're investing in a more valuable asset.

A thoughtfully designed ADU will attract tenants more easily, potentially increasing rental income and reducing vacancy time.

For homeowners, the value of your property will rise, ensuring that your investment pays off. The initial investment in design may sound like a lot, but it’s actually a very small part of the overall project budget, and even smaller part of the lifecycle cost of your project. For most ADUs, the design fees will be offset with only 6-12 months of rental income. This doesn’t even take into account the increase in your property value.

Considering ADUs can last decades, design is a tiny investment to make in a long term appreciating asset that can cashflow on a monthly basis.

5. Long-Term Savings:

Professional designers don’t just think about the immediate construction phase but also about the long-term sustainability of your ADU.

They can incorporate energy-efficient design elements that lead to lower utility bills and reduced maintenance costs. This can translate into significant savings over the years, offsetting the initial design fees and contributing to the overall financial viability of your ADU project.

Often these lifecycle savings can be multiples larger than the initial design fees. Wouldn’t you spend $25,000 to hire an experienced designer now to save $3,000 to $4,000 in maintenance and utility costs per year over 20 years? Design fees can easily cover themselves when taking a long term view of your ADU project.

6. What is an Appropriate Design Fee:

We have referenced 10-15% a few times in this article and I think it is a good range to roughly estimate what the fees should be for your ADU project. As you are setting your overall project budget it would be wise to pencil in fees in that range. The percentage can vary depending on the quality of the designer (higher fees often mean more experienced, better designers!), the complexity of your project, and the overall scope of work you ask the designer to handle for you.

This percentage range probably translates into an actual fee in the $20,000 to $50,000 range based on average costs of detached new construction ADU projects these days. We find that most ADUs come in at between $200,000 and $400,000 with some fancier, more luxurious designs coming in even higher than that.

This might sound like a lot of money, but like we discussed above, think of design as an investment, not a fee. You are hiring an expert to guide you through the process, help you make the best decisions for your project, and to be an advisor who has your best interest in mind as they work on your project.

Investing in design is money well spent. I even argue that the higher the design fees the better your project will come out. With higher fees you will get to hire a more experienced team, you will get more attention, and that expert design team can spend more time working to make your project a big success.

7. Start With A Total Project Budget (Design Fees Are Not An Added Cost):

Too many people take the viewpoint that the cost of hiring a designer is an added fee increasing their project cost. You may look at design as a place that you can save money. This is the wrong viewpoint.

Begin by developing a total amount you are willing to invest in your project. Say it is $300,000 all-in. Now you work backwards from that number to break down your budget into different buckets.

Say there are $10,000 in estimated permit fees. Investing in a expert design team runs $30,000. Add $4,500 for structural engineering, $5,000 for a survey, and $500 for title 24 report. That is a total soft cost amount of $50,000, which leaves a construction budget of $250,000 for the ADU itself. You should be able to get a high quality ADU designed by a team of experts all within the total project budget.

Looking at the chart below, you can see how small the design fees actually are in the context of the total project cost.

In conclusion, while design fees for your ADU project may initially seem like an added cost, they are, in fact, a prudent investment in your project's success. Allocating 10-15% of your budget to design fees ensures you receive a customized, code-compliant, and aesthetically pleasing design. The expertise, tailored solutions, and regulatory know-how that an experienced designer provides can save you time, money, and stress in the long run. Moreover, a well-designed ADU can increase your property's value and generate long-term savings, making it a sound financial decision. So, don't hesitate to invest in professional design services; it's an investment that pays dividends in the quality and value of your ADU project.

How Much Does An ADU Cost?

More and more people are considering having an ADU designed and built for their property, and one of the primary questions they have is how much does an accessory dwelling unit cost to build? People like you want to know how to start budgeting for ADU projects whether they are living on Bainbridge Island outside of Seattle, in Portland, OR, or down in Los Angeles, California. ADU Cost is one of the most common questions we get and we will do our best to outline the areas that impact ADU budgets below.

The problem with googling “ADU Cost”

A quick search on google for cost of construction can lead to a wide range in estimates, and most of them are not realistic, especially for ADUs. Having worked on over 60 ADUs to date we have designed everything from simple 500sf projects on flat lots to larger 1000sf ADUs on tricky sloped sites. We have a good sense of the cost ranges for these projects and what factors impact the final price. We will do our best to outline how to set your budget and then will give a breakdown of ADU costs from a recent project that you can use as starting point to build your budget.

But first, let’s discuss cost per square foot numbers and why you shouldn’t use this is a way to develop a budget for ADU projects.

Many resources on the internet, some contractors, and many clients use cost per square foot as a basis to develop a budget for residential projects. I want to urge you not to use this as a metric to analyze your ADu budget. Although this can work if you have your numbers correct, we find that it can be very misleading for budgeting an accessory dwelling unit compared to a full custom home. The main problem has to do with scale.

Just like a large home, ADUs have all the expensive parts needed to live - a functional kitchen, bathrooms, plumbing and electrical systems, windows, doors, excavation and utility work, plus design costs and permitting fees. On a large home these costs get spread out over the larger square footage and cheaper space to build, like bedrooms and living rooms. A good way to think about it would be that the cheaper rooms like bedrooms and living rooms subsidize the more expensive rooms like kitchens and bathrooms plus utility connections, etc. ADU floor plans don’t have this advantage since they are limited in size.

Not all square footage is the same cost. A bedroom is just empty space with blank walls, a couple of windows perhaps, some flooring, and a couple of doors. This is relatively cheap to build. A kitchen on the other hand has all the walls and floor, but more lighting, appliances, counters, cabinets, plumbing work, more complicated electrical, etc. It is much more expensive to build. Where a bedroom may be $150/sf a Kitchen is more like $400 or $500/sf. This means that going from a 700sf to an 800sf project can actually bring your cost per square foot down considering both have a kitchen and a bathroom. The 800sf ADU spreads those costs out over an additional 100sf.

With ADUs being so small, they don’t have the extra square footage to spread the base costs out like a larger home does. A $200,000 five hundred square foot ADU would have a cost per square foot of $400. Where a $600,000 two thousand square foot home would only be $300/sf.

The point here is that we encourage people to develop a budget and then work to design something to hit that total project number. The size of the unit is less of an impact on final cost than the form, site conditions, materials, and systems selected. Start your project knowing that the base cost of building an ADU will be about $200,000 and then the decisions you make with your design team will impact what the final cost ends up being. Our advice is usually that ADUs come in between $200,000 on the low end and $500,000 on the upper end. We have seen some luxury ADUs in the Bay Area and Los Angeles even exceed $500,000.

How Much Should You Budget For Your ADU Project?

ADUs have three main costs to build into your budget: design fees, permitting fees, and construction costs.

ADU Design Cost

For a custom designed ADU you can expect that the design cost will be between 10-20% of your total project costs. These would include the cost of an architect or designer, structural engineer, surveyor, and other consultants that may be needed. Although most people decide they want a custom designed ADU that is specific to their needs, aesthetic taste, and responds to the unique character of their property, it is possible to save on the design cost by starting with a pre-designed ADU plan set. If you are trying to bootstrap a project and reduce costs as much as possible this could be a good way to go. We sell ADU floor plans of our past projects for those looking to save time and money. Shop for a floor plan design that works for you here: Modern ADU Floor Plans

ADU Permitting Cost

Permitting fees can vary greatly from city to city, but in Portland, Oregon you can expect that the permit fees for a detached ADU would be between $6,000 and $14,000, potentially more if you are going to use the ADU as a short term rental like Airbnb or VRBO. The big range here has to do with water service and whether you will have to upgrade the water meter for the property and/or add a new water meter for the accessory dwelling unit. If you are able to simply tie in to the existing water and sewer service of the main house you would fall on the lower end of the range. However, you may want to chose to install a new water meter if you will be using the ADU for rental income, so you can pass on the water utility bill to the tenants.

ADU Construction Cost

Construction cost is the big variable and depends on the site conditions, project size, design complexity, and the selection of materials and systems. We find that with today’s construction costs building an ADU, even smaller simpler projects on flat sites, will come in at $200,000 or more. That is sort of the baseline price, and the cost can go up from there depending on some of the variables mentioned above. Building an ADU can be complicated and we don’t advise taking shortcuts to save cost.

Although $200,000 is achievable for a nice but simple ADU, in our experience, most clients decide to add features that drives the cost up from that baseline. Whether it is nicer windows, higher performing systems, nicer interior finishes, high-end appliances, or premium materials, there is almost always a decision that is made where the clients balance the quality vs price and decide to upgrade the design. For this reason, we say that the average price of an ADU is about $250,000 in the Portland market. In places like the Bay Area or Seattle the average cost for an ADU is closer to $350,000 or more. On the higher end of the scale, if you are looking for a premium luxury ADU with the top of the line systems and appliances, high-end materials, and a premium design, you can look to spend $400,000 to $500,000 or even more.

Keep in mind that these construction cost estimates are for the construction only. On top of the construction costs needed to build the ADU, there would be the 10-15% in design fees and $6,000 to $14,000 in permitting fees. When you build your budget and talk to your design team about the project costs, make sure to be clear what the costs of construction are and what the total project costs are. $200,000 in construction costs probably means a total ADU project budget of closer to $240,000.

Interior view of a studio ADU on the second floor with a home office below.

This project current being designed is on a sloped site which requires additional concrete foundation work.

Accessory Dwelling Unit (ADU) Construction Cost Breakdown:

To give you a sense of how the construction budget gets to those ranges, below we have broken down a budget for a 790 square foot ADU we designed in the Cully Neighborhood in NE Portland. This ADU is being used to generate rental income and the couple who built it plan to move into the ADU when their kids leave the house. It was designed for aging-in-place with all necessary living functions on a single level.

Below is a rough construction cost breakdown for a 790 square foot sustainable ADU that was built in the summer of 2015 in Portland, OR (we’ve inflated pricing below to reflect an average 6% construction cost increase per year since that time). This design has a few unique elements that are reflected in the cost breakdown. The design includes a high performance envelope - typical wall construction with standard batt insulation walls & roof per code, plus an additional 2” of continuous exterior insulation on all the walls, and an additional 3” of continuous exterior insulation added to the roof, plus a fully insulated slab. We also designed it to have radiant floor heating with an on-demand hot water system. There was also a couple of unique custom windows that are significantly more than standard windows would be - however they were important to the design and function of the spaces.  

Finally, this breakdown is for the construction costs and doesn't include Architectural or Structural Design Fees. The design fees vary depending on the complexity and size of your project. We recommend budgeting about 10-15% on top of the construction cost for design fees, $6-14k for permitting, and we always recommend budgeting another 10% as a contingency fund to cover any unexpected costs that may come up.

Permits: $12,000
This includes the current Portland SDC Waiver. Typically permitting fees for an ADU fall around $6-$14k. This project came in at the higher end due to the fact we had to upgrade the water supply line & meter size due to the amount of plumbing fixtures in the main house and ADU combined.

Excavation: $15,000
Around a 650sf slab area including the exterior decks. Also included excavation for a couple landscaping retaining walls on the property.

Concrete Work: Footings & Retaining Walls: $28,000
This includes work needed for the ADU plus a couple of retaining walls that were designed as part of the surrounding landscaping.

Concrete Slab: $8,000
The interior exposed concrete slab and finishing for the floor of the main level. This was poured as a separate slab from the foundation footings.

Framing and Sheathing: $25,000
Typical 2x6 stud wall construction, 2x12 roof joists, supporting structural posts and beams. The large exposed glulam beam in the center of the project was around 30’ long to span the length of the living space.

Siding: $12,000
Horizontal fiber cement siding with vertical tongue & groove cedar siding at the front entry and back patio, as well as a cedar soffit under the eaves.

Roofing: $15,000
Standing seam metal roof

Windows and Doors: $15,000
2 custom windows (including a complex window that wraps the corner of the kitchen), 3 skylights, 8’ front door with sidelite, 8’ two panel sliding door, and three large vinyl sliding windows.

Plumbing: $25,000
Includes radiant floor heating installation and an on demand hot water system. Plumbing fixtures, sump pump, fire protection sprinklers & installation.

Electrical & Fixtures: $20,000
Electrical panel, electrical wiring, outlets and switches, lighting fixtures, and installation labor.

Insulation: $12,000
Roxul batt insulation in walls and ceiling stud cavities per code, plus an additional 2” of continuous exterior polyiso insulation on all walls, 3” of continuous exterior polyiso insulation added to the roof, and a fully insulated slab on grade. (This amount of insulation is well above code requirements and is close to passive house standards. With some solar panels this ADU could easily achieve net zero energy. )

Sheetrock (Drywall): $10,000
Drywall, mudding, taping, sanding

Interior Doors: $2,500
2 standard doors, 1 pocket door and 3 closet bi-folding doors

Paint - Exterior: $5,500
One color, no accent or trim color

Paint - Interior: $8,000
One color throughout the interior.

Trim Work: $5,500
1x4 painted MDF base trim, plus clear coated fir window sills

Cabinets: $6,500
IKEA kitchen cabinets and some custom casework in laundry and bathroom

Countertops: $1,500
Ikea wood countertops material and install labor

Tile: $7,000
Kitchen backsplash and shower - materials and labor

Staircase: $3,500
Off the shelf spiral staircase kit

Flooring in Loft: $3,500
Pre-finished solid White Oak, about $8/sf plus misc. materials and install labor

Cable Railing: $3,500
Off the shelf system

Appliances: $7,000
Stovetop, oven, vent hood, dishwasher, garbage disposal, refrigerator, washer, and dryer

TOTAL: $251,000
Includes all materials, labor and contractor fees.

The budget above is fairly typical for ADUs we have worked on over the years. And it is important to point out that this wasn’t a high-end or luxurious project. There were a few places where the clients made decisions to invest more to get the result they were looking for. For instance we had some custom windows, skylights, and radiant floor heating. The rigid insulation was also an upfront cost but will pay itself back through lower energy bills for the lifetime of the project. Meanwhile, the rest of the project was pretty standard materials and systems and in some places we used cheaper than normal elements, like the Ikea kitchen. Overall, we think this is a good starting point for most people who want a high-quality, nicely designed accessory dwelling unit in Portland, Oregon.

Important Note:
Every site is different and the conditions can greatly impact cost. Excavation and concrete work costs can vary greatly depending on the topography and of the site and other conditions (is it sloped? lots of trees? poor soil conditions? Does it need extra soil removal or backfill?). Ease of access to the location of the ADU can also add costs (are there fences that need to be removed and rebuilt? Can machinery get to the location to excavate or deliver materials? will a crane rental be required?). Material selections and other design decisions you and your designer will make throughout the process will also have a big impact on cost. The outline above is a good starting out point but I guarantee your project will end up being different.

If you have any questions don't hesitate to reach out. We are always happy to talk about the unique aspects of your project and talk through your goals and ideas for a sustainable Accessory Dwelling Unit.

This ADU in the Cully Neighborhood of Portland would cost about $250,000 to build.

Interior view of the ADU’s main living space with an open loft above. A 30’ long glulam beam spans the length of the living room.

A large custom window wraps the corner kitchen, offering great views to the surrounding yard.

Why Everyone Should Consider Building an ADU

A modern Detached ADU in Portland, OR designed by Lucas Gray

Across America, cities and towns are facing rapidly rising housing prices that outpace increases in salaries. This is causing a housing crisis where the average person can't afford to own a home and sometimes can't even find affordable rental units. This is a huge issue here in Portland, Oregon and the government and many passionate citizens are trying to develop solutions. Sometimes this comes in the form of publicly subsidized affordable housing, yet there is also a movement to address this through market rate solutions in the form of Accessory Dwelling Units or ADUs.

ADUs, sometimes called laneway housing, granny flats, DADUs, backyard cottages, and many other terms, is a small secondary house built on the property of a typical single family house. Although each jurisdiction that allows these housing types has different rules and regulations, for the most part they all lead to the same end result - more housing options in our neighborhoods while preserving neighborhood character. They add density in a sensitive way while giving homeowners the potential for rental income, and renters an affordable housing type in neighborhoods throughout the city.

There are three primary uses for ADUs. Many people build them to downsize their life. Perhaps their kids have left the house and they no longer need as much space. Adding an ADU in the backyard can be a great way to downsize your living space while renting out the main house to a new family to grow in. Another common use is for aging family members. Often ADUs are built for barrier free living and Accessibility for aging-in-place or multi-generations living together on a shared property. The third primary use is as a rental unit, either long-term rental or short-term (think Airbnb). For this last use, the benefit is that the ADU can provide additional income and help cover mortgage payments. This can help people afford to stay in their homes as costs increase, or allow young families to be able to afford buying a home in the first place.

ADUs are not allowed in all jurisdictions although they are growing in popularity and most cities and towns are considering ways to allow them within their codes and regulations. In Portland, ADUs are limited to 800sf in size and 20' in height. The goal being to keep the accessory dwelling a bit smaller than the main house. This still is enough space to have a very nice 1 to 2 bedroom unit. Within this size limitation, there are endless options and creative design solutions to make these projects wonderful places to live.

I have worked on more than 50 ADU projects over the past 8 years and have become an expert in designing creative small scale housing that still becomes a great place to call home. I love this project type because it addresses so many of the issues facing our cities - ADUs increase density, they are small and efficient homes and are inherently sustainable, they provide supplemental income to homeowners often preventing displacement and allowing people to stay in their neighborhoods, and they are fast paced design projects that allow for creativity and experimentation.

A full sized kitchen with custom cabinetry fits nicely into this 700sf ADU.

Working with people of all backgrounds that are interested in ADUs is one of my passions. I love education people about the opportunities and challenges of these project types and answering questions about cost of construction, how long it takes to design and build an ADU, and design regulations that affect these projects. Please feel free to reach out if you are considering one of these projects on your property. I’d love to help.

Although ADUs are small projects, they are still complicated and need a close attention to detail to make them successful. This is another reason why reaching out to an experienced design team is important to achieve a great ADU. Fitting all the parts of a full house in an 800sf size is challenging and needs some creative space planning. I have many examples of ADU designs, floor plans, and other resources that can help inform your thoughts as you consider adding an ADU to your property. Using my breadth of experience I can help make your project be successful while balancing beautiful designs with functional layouts that meet the project budget.

A spacious ADU bathroom with no threshold shower designed for barrier free living and aging in place.

ADUs can come in a variety of styles to fit your needs, taste, and the context in which they are built. Some places have restrictions on what they can look like, but for the most part ADU designs can be traditional, modern, or any aesthetic that you would like. The options are endless and they can be custom designed to address your unique lifestyle and tastes. If you are considering an ADU, I am available to help guide you through the design, permitting and construction process.