What Is an ADU—and Does It Really Add Value?

You may have heard the term ADU more and more lately—but what exactly is it, and is it worth it?

As a real estate agent with over 29 years of experience, I get this question all the time.

What Is an ADU?

ADU stands for Accessory Dwelling Unit.

Simply put, it’s a secondary living space on a property that has:

• Its own entrance
• A kitchen
• A bathroom
• A sleeping area

Common types of ADUs include:

• Basement apartments
• Garage conversions
• Detached guest houses

It’s not just extra space—it’s a fully functional living unit.

What Does It Take to Be a “Legal” ADU?

This is where many homeowners get tripped up.

To be considered an official ADU, it must:

• Meet local zoning and building codes
• Be properly permitted with the city
• Have separate living facilities (kitchen, bath, entrance)
• Pass inspections for safety and habitability

If it’s not permitted, it may just be considered “non-conforming space”—which can affect value and financing.

Does an ADU Add Value?

In many cases—yes, it absolutely can.

Here’s why buyers love them:

• Rental income potential
• Multi-generational living (parents, adult children)
• Private guest space
• Flexibility for home offices or future needs

But here’s the key:
Not all ADUs add the same value.

Value depends on:

• Whether it’s legally permitted
• Quality of construction and design
• Location and demand in your market
• Size and functionality

My Advice After 29+ Years

Before you build an ADU—or buy a home with one—it’s important to understand:

• What your city allows
• What buyers in your area actually want
• Whether the investment makes financial sense

I’ve seen homeowners spend a lot building an ADU that didn’t add nearly as much value as they expected—and others where it made a huge difference.

If you’re considering adding an ADU or buying a home with one, I’m happy to help you evaluate your options.

Sue Monroe
RE/MAX Leaders
303-717-7349
www.suemonroe.com