Practice Strategies

An Accessory Dwelling Unit (ADU) is a secondary residential unit on the same property as a primary home. Common examples include detached ADUs (freestanding structures), attached ADUs (connected to the main house), or garage conversions. Homeowners often build ADUs to:

• Accommodate aging family members or adult children.
• Generate rental income as a long-term investment.
• Increase property value through additional living space.

If you're considering an ADU, it’s important to evaluate your property’s zoning regulations and infrastructure to ensure compliance with local laws.

The cost of building an ADU varies depending on size, materials, location, and complexity. On average, homeowners spend $50,000 to $250,000 on an ADU. Here’s a breakdown:

• Garage Conversions: $50,000–$100,000
• Attached ADUs: $100,000–$200,000
• Detached ADUs: $150,000–$250,000+

Keep in mind that factors like design customization, permits, and site preparation can increase total costs. Always request detailed quotes from multiple contractors to ensure accurate estimates.

In Phoenix, you’ll typically need zoning and building permits to construct an ADU. Depending on your city or county, you may also have to submit:

• Site plans
• Utility connection approvals
• Engineering or structural reports

Check your local building department’s website or contact a professional ADU contractor who can guide you through the permitting process. Accurate documentation and upfront compliance can save you time and penalties during the construction phase.

The timeline for building an ADU typically ranges from 6 months to 18 months. Here’s an overview of the stages:

1. Design and Planning: 2–4 months (including permits and engineering approvals)
2. Construction: 3–9 months (actual building and inspections)
3. Finalization: 1–3 months (finishing touches, landscaping, approvals)

Timelines can vary based on project complexity, contractor availability, and your local building department’s approval process.

When hiring an ADU contractor, look out for the following red flags:

• Refusal to provide proof of licensing or insurance.
• Lack of experience with ADU projects.
• Lowball estimates that seem too good to be true.
• Contractors asking for large upfront payments before starting work.
• Poor communication or unwillingness to provide a clear project timeline.

Always read reviews, request references, and verify your contractor’s credentials with your state licensing board before signing a contract.

To ensure your ADU complies with building codes, follow these steps:

1. Consult Local Regulations: Research the zoning and building ordinances in your city or county.
2. Hire a Reputable Contractor: Partner with a builder experienced in ADU projects within your area.
3. Obtain Necessary Permits: Secure all required permits from your local building department before breaking ground.
4. Schedule Inspections: Allow inspectors to evaluate the project at key stages to confirm compliance.

For specific building code inquiries, visit the International Code Council (www.iccsafe.org) or consult your local building authority.

In Phoenix, many homeowners are allowed to rent out their ADUs, but rental regulations can vary significantly depending on local laws. Common requirements include:

• Securing a rental license or registration.
• Complying with maximum occupancy rules.
• Following rules regarding short-term rentals (e.g., Airbnb).

It’s important to verify rental guidelines with your city or county housing authority before listing your ADU to ensure compliance and avoid fines.

A Junior Accessory Dwelling Unit (JADU) is a smaller, more compact version of an ADU, typically limited to 500 square feet. Key differences include:

• JADU: Often repurposes existing space within the primary residence (e.g., a spare bedroom or garage) and may share facilities like a bathroom or kitchen.
• ADU: Can be a completely separate structure with its own kitchen, bathroom, and entrance.

JADUs are ideal for limited spaces or lower budgets, while standard ADUs offer more independence and privacy for tenants.

Converting a garage into an ADU is often a cost-effective and efficient way to add livable space because:

• The existing structure reduces construction costs.
• Garage conversions often bypass strict zoning restrictions.
• They provide an opportunity to repurpose underutilized space.

However, you’ll need to ensure the garage meets structural and insulation requirements, and you may need to relocate utilities or parking spaces. Consulting a professional is key to a successful conversion.

Financing an ADU can be accomplished through various methods, including:

• Home Equity Loans/HELOCs: Borrowing against the equity in your home.
• Cash-Out Refinancing: Refinancing your mortgage to access additional funds.
• Personal Loans: Unsecured loans with flexible terms for smaller projects.
• Government Grants or Subsidies: Some states and cities offer financing assistance for ADUs.

Work with a financial advisor to choose the funding method that best fits your budget and long-term goals.