Accessory dwelling unit (ADU) costs swing wildly — a garage conversion can run under $100,000 while a custom detached unit in a high-cost market tops $250,000. The difference comes down to four things: build type, size, finish level, and where you build. This guide explains how those factors stack up, what permit and utility fees add, and how to tell whether rental income actually pays the project back.
How ADU costs are built up
This calculator starts from a national base cost per square foot for each build type, then scales it by three multipliers: finish level, regional cost market, and site-work difficulty. The base figures reflect the UC Berkeley Terner Center ADU construction cost survey (2024-25) and 2026 national contractor benchmarks, where a typical US ADU runs roughly $100–$300 per square foot. A basic finish trims about 15%; a high-end finish adds about 25%. A high-cost coastal market can add 35% or more, while a low-cost interior market subtracts around 15%. Hard site work — a sloped lot, long utility trenching, or a panel upgrade — adds roughly another 15%. Multiply it all out, add permit and impact fees, and you have your all-in cost.
What each build type really costs
Type is the single biggest cost lever. A garage conversion is cheapest because the foundation, walls, and roof already exist — you're mostly adding a kitchen, bathroom, insulation, and utilities. An attached ADU shares a wall and some systems with the main house, landing in the middle. A detached unit is the most expensive: a new foundation, full envelope, and its own utility connections. Prefab/modular units have a low unit price thanks to factory efficiency, but delivery, crane, foundation, and site hookups bring the installed cost to mid-range — their real advantage is a faster, more predictable build. The ordering holds at any size or region: garage conversion < attached < detached, with prefab mid.
Does an ADU pay for itself? Payback and cash-on-cash
An ADU pays for itself through rent. Simple payback divides your all-in cost by annual rent — a $200,000 build at $2,200/month recoups in about 7.6 years if you pay cash. Financing changes the math: a HELOC or construction loan adds interest that reduces your net rent, so financed payback is longer, and at a high enough APR the rent may not cover the interest at all. Cash-on-cash ROI — net annual rent divided by the cash invested — is the yield on your money. Before you count on any of it, check your local ADU rules: many states and cities cap unit size, limit short-term rentals, or require the owner to occupy the property, all of which change what you can build and rent.
Sources
Base cost-per-square-foot figures are drawn from the UC Berkeley Terner Center ADU construction cost survey (2024-25) and corroborated by 2026 national contractor benchmarks (Angi, HomeGuide, RenoFi); permitting and program guidance references HUD's ADU resources. Regional, finish, and site-work multipliers are directional editorial estimates, not exact local quotes. All figures are national averages that vary widely by builder, lot, and jurisdiction — get contractor quotes and confirm local rules before budgeting. This is an estimate, not financial or construction advice. Last verified July 2026; refreshed when new Terner Center cost data is published.