Accessory Dwelling Units (ADUs): A Real Estate Investment Opportunity in 2024

Levi Design Build has published an article highlighting Accessory Dwelling Units (ADUs) as an investment opportunity in real estate. These versatile small houses, ranging from in-law suites to detached cottages or garage conversions, increase property value by offering the possibility of generating rental income.

The article details the construction costs of an ADU, ranging from $146,500 to $216,500, with a potential average annual income of $24,636, allowing for a return on investment of 7% to 15% within six to ten years. Based on real market analyses in California, the article provides an economic overview of ADUs.

It also shares the success story of Selma Hepp who, after converting a garage into habitable space, now earns approximately $3,000 per month in short-term rentals, covering her mortgage costs.

Levi Design Build anticipates that the ADU market value will reach $10.6 billion by 2030, with an annual growth rate of 18.6% from 2024 to 2030, underscoring the importance of investing in ADUs now to benefit from the increasing demand.