What is an ADU in Real Estate?

In the world of real estate, ADU stands for “accessory dwelling unit.”

But, are ADUs a good option for you? Lets take a look!

What is an ADU in Real Estate?

A dwelling unit is considered “accessory” or “ADU” when it is secondary to the primary dwelling unit and located on the same zone lot.

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Examples of attached ADUs include:

- Basement apartments

- Attic apartments

- Above garage unit

- Converted attached garage suite

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Examples of detached ADUs include:

- Backyard cottages

- Granny Flats

- She Sheds

- Detached garage studios

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What Are ADUs Used For?

Accessory dwelling units can serve a variety of purposes and all should be taken into consideration before making a descion...

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What Are ADUs Used For?

They can be used to accommodate additional family members, such as parents moving in or adult children coming to stay during summers.

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What Are ADUs Used For?

More recently, ADUs have gained prominence as a source of income for homeowners that don’t necessarily want to invest in a separate property.

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What Are ADUs Used For?

You can earn revenue through rent from yearly tenants, or by listing the ADU as a vacation rental unit. 

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What Are ADUs Used For?

An ADU may act as both a guest living space and revenue source. You can use ADU for when family visit and rent it out for the rest of the year as an AirBnB. 

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Do ADUs Add Value to a Home?

An ADU can add value to your home. The selling price of a home is largely dependent on location and square footage, and an ADU will increase the latter. 

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Do ADUs Add Value to a Home?

Certain types of ADUs are more valuable than others and, therefore, more worth the upfront cost.

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Do ADUs Add Value to a Home?

Detached cottage dwellings tend to add the most value to a home, since they are private but also add square footage.

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Do ADUs Add Value to a Home?

However, there are some AUDs that actually decrease the resale value of your home. We are talking mostly about converting a garage.

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Do ADUs Add Value to a Home?

Having a usable garage is a major selling point in most homes. If resale value is your sole concern, sacrificing the garage for extra square footage is not a good idea.

An experienced Realtor is best when considering a home with an ADU. If you are weighing the pros and cons of this option in Colorado, contact Brenda Kellogg Meyer with Exit Realty.