First-time listings with accessory dwelling units (ADUs) or second homes have grown quickly over the past decade at an average rate of about 8.6%. ADUs are increasing in popularity for a variety of different reasons.

If you have a lot of space available on your property, you might be tempted to add another house to it. However, there are some things to think about when considering this as an option, and doing it isn’t as straightforward as you might expect.

In this guide, we’ll let you know whether you can build a second home on your property and tell you what to think about when doing it.

Can You Build a Second House on Your Property?

So can you build a second house on your property? If you live in California, the answer to this question is yes. However, it’s not as simple as it seems.

Generally, owners of single-family homes in the Los Angeles area can build ADUs. The state of California has passed a bill allowing ADUs and even overriding local zoning ordinances.

If you belong to an HOA, reasonable restrictions may be in place. You’ll need to check with your HOA and meet certain requirements to build an ADU.

You’ll also need to check with your city or municipality as well to find out what the restrictions are for building a second home on your property. There will be real estate laws that you’ll need to be aware of and pay attention to.

There may be regulations and specifications that you’ll need to follow when building based on what has been set in your local area. Without local limits, California state law limits ADU size to 1,200 square feet. However, local jurisdictions are required to allow up to 850 square feet.

If building a second home is allowed on your property, you’ll likely need to fill out a lot of paperwork. You’ll want to make sure that you follow all requirements and do things by the book.

Keep in mind, however, that in some cases it can take a long time to get approved. Some cities and local areas make the process more difficult and time-consuming than others.

Be sure to visit your town’s office to find out more about the rules and regulations in your area.

Why Aren’t ADUs Allowed in Some Places?

While California is now very accepting of ADUs, there are many reasons why they haven’t been allowed in the past and reasons why certain cities, municipalities, or neighborhoods may still discourage them.

One of the primary reasons is that the city or neighborhood may want to make sure that the town looks good visually. Some people are afraid that allowing ADUs could lead to a neighborhood becoming unattractive or declining in quality in some way.

By placing restrictions on ADUs, they feel like they can ensure that neighborhoods remain attractive and safe. Some neighborhoods simply want to avoid having too many renters and prefer to have more homeowners instead. Some also fear that ADUs will lead to increased parking and traffic issues as well.

A lot of the problems that people expect to see around ADUs are unwarranted, however. Fortunately, many places around the country are starting to recognize the benefits of ADUs and are starting to understand how they can help with the current housing crisis in the country.

For many cities and neighborhoods, ADUs still remains controversial. Many simply don’t want to allow homeowners to build a second home on their property, even now.

Benefits of Building an ADU

So why are ADUs becoming more popular in California and in the United States as time goes on? Here are some reasons why it might be the case.

Perfect for Family Members

One of the top reasons that people choose to build second homes on their properties is that it gives them the ability to care for and stay close to aging parents.

Often referred to as a “granny flat” or a “mother-in-law suite”, ADUs can be great for an elderly family member to live in. A family member will be able to retain a sense of independence while also staying close to their loved ones as well. This can help to improve their safety while also allowing them to be comfortable and feel self-sufficient.

While ADUs are often used by older family members, they can also serve as good living options for younger family members as well. They could also be used as a guesthouse for visitors to a home and can be a very comfortable option for a friend or family member who wants to stay over for either a short or long period of time.

Build Rental Income

For homeowners, another great benefit of adding an AD to a property is that it creates the potential for rental income. There are various ways that a homeowner can rent out a mother-in-law suite, both in the short term and the long term.

When you rent an ADU out, you’ll be able to do it in a way that offers privacy to both you and your family as well as for the tenant. You’ll also likely be able to charge more for an ADU than you would be able to for a single room in your home.

While you can choose to rent an ADU out month to month, many people choose to rent ADUs out as Airbnbs or VRBOs and only allow for short-term stays. This can be even more lucrative.

There are a lot of possibilities for making additional income from a granny flat, so building one on your property could be worthwhile.

Maximize Property Value

Another financial benefit of building an ADU is that it can help increase your property value.

While the costs to build an ADU can be significant, you’ll also find that they can add 35% value on average to a property compared to properties that don’t have one. While all types of additions and remodeling jobs can potentially increase the value of your home, adding an ADU can be particularly beneficial. If you have the money to spend on it, doing so can be well worth it.

You’ll want to consider the costs of building a mother-in-law suite carefully, however. Make sure that it will be worth it for you and that you’re satisfied with the amount of value it could add once your home is appraised.

Assist With the Housing Crisis

One of the reasons that ADUs are growing in popularity right now is that they can help with the California housing crisis. Many people see ADUs as a great solution to the housing crisis. They suggest that allowing them to be built more often and in more places will play a big role in creating more affordable housing for Californians.

With a lack of affordable housing out there right now, ADUs can serve to benefit many people while also serving as a great source of rental income for homeowners.

Things to Think About When Building Multiple Homes on a Property

So if you’re thinking about making the plunge and building a detached mother-in-law suite, there are some things that you’ll want to think about beforehand. Here’s what you should consider.

Know the Restrictions and Permit Requirements

The first thing you’ll want to consider when building an ADU is what the restrictions are in your area.

You’ll need to do your due diligence and find out exactly what is required in your neighborhood and in your municipality or city. Visit a local government office to find out exactly what the requirements are and what permits you’ll need to build.

Make sure that you find out all of this information before you get too far into your potential ADU build if you don’t want to waste a lot of time and energy.

Determine the Costs for Building in Your Area

Not only will you need to think about the requirements for building a mother-in-law suite but you also need to consider the costs as well.

Despite being much smaller than a standard home, ADUs will often be pretty expensive to build. It can be costly to come up with the materials as well as to ensure that all of the structural and utility features such as electricity and plumbing are in place. You’ll also need to pay for inspections and other services as well.

You should get quotes from multiple builders to get an idea of what the costs are early on in your build. This will help you avoid having a half-finished project or paying much more than you expected.

Understand Your Plan for the ADU

When you’re planning an ADU, you should make sure that you think through your purposes for it and how it will be used. You should also make sure that you consider what functionality you’ll need both in the short-term and in the future.

If you plan to use your second home for an elderly family member in the short term but plan to rent it out later, you’ll want to make sure that you have all of the features you need for each purpose. It’s important to consider accessibility features for an elderly family member, for example. However, it’s also important to consider whether you have all of the necessary features to make the home a comfortable rental as well.

Be sure to think carefully about the specifications of the ADU and the specific features and amenities it will have. You should also think about the interior design of the ADU as well.

Hire the Right Contractor

If you want to build a great ADU on your property, then you should pay special attention to who you hire for the job.

Not every construction company or builder will have experience with ADUs and will understand the intricacies of their design and the permits that you need. If possible, you’ll want to find a contractor that specializes in building ADUs so that you can work with someone who is experienced and will do the best quality work.

Make sure that you research the builders in your area and find out whether they have experience with ADUs. Compare their prices and reputations as well. This way, you’ll be sure to get a great end result with your project.

Understand Types of ADU Construction

Keep in mind that there are various ways that ADUs can be constructed, so you’ll want to research the pros and cons of each option. Talk to a builder to learn more about the differences. You can make ADUs fully on-site, but ADUs can also be built in a factory as well.

Many ADU builds will use a combination of both types of construction. For example, many elements such as walls, windows, electrical wiring, and plumbing can be constructed in a manufacturing facility and then placed on the site to finish the construction of the home.

Additionally, there are alternatives to building detached ADUs as well. You might want to consider an ADU garage conversion, for example.

Making the Decision to Build a Second Home on Your Property

If you want to build a second home on your property, make sure that you know what to expect. While there’s a good chance that you can build an ADU, you’ll need to check with your local government and neighborhood first and ensure that you’re doing it legally.

Ready to build an ADU on your property? Click here to learn more about choosing a contractor for an ADU.