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Accessory Dwelling Units

ADU Costs

And more importantly, how much money can you earn by building, financing and renting out a home in your backyard?

 

How much does it cost to build an ADU?

Our mission is to reduce the cost to build an ADU. However, there are some real challenges to this mission, such as a hot construction market, which has driven up the cost of labor and materials. Fortunately, our ADU models provide our building team with predictable layouts and details resulting in better cost control than fully custom ADUs.

The base costs to build our pre designed backyard homes are listed on our ADU Model page and Garage Conversion page, but it is first important to understand how and why ADUs make financial sense.

 

ADU-Financing-Acessory-Dwelling-Units-Los-Angeles

ADU Return on Investment

Los Angeles is an extremely viable market for ADUs. It pays to build an ADU in your backyard because:

  1. The land is (basically) free
  2. Financing is available and relatively inexpensive
  3. Rents are high in Los Angeles
  4. ADUs tend to cash flow immediately and can provide tens of thousands of dollars of rental income per year.
  5. ADUs add enormous resale value to your property.
  6. Modative's ADU models provide cost and schedule predictability

 

Case Study

We ran a detailed financial projection on building, financing and renting out our 2 Bedroom, 1.5 Bath, 2-Story, ADU Alpha Model in West Los Angeles and the returns are very promising.

Here is a link to download the full financial projection.

West Los Angeles  90025

The projected rent for the 1,019 sq. ft. unit is $4,354/month

The all-in cost to build this (fully loaded) ADU is projected at $361,358, which sounds like a lot, but when financed at 90% Loan to Cost, creates a monthly payment of $2,231. 

So, after the projected monthly loan payment, increase in property taxes and insurance, plus a few other expenses, the anticipated net return is $1,622/month or almost $20,000 per year! A nice bit of cash for letting go of part of your backyard.

los angeles adu case study

Modative works as your one-stop-shop for ADUs, but, it is important to understand what our services, and associated costs include and what they exclude.

Included Costs:

  • Architecture Fees
  • Structural & Title 24 Engineering
  • Survey (not always required)
  • Permit Processing
  • Construction
  • Project Management of all of the items above. You only deal with Modative.

Excluded Costs:

  • Financing
  • Permit and other City fees 
  • Soils Engineering (typically not required)
  • Landscaping Design or Install (not required)
  • Any new fences, gates or driveways
  • Insurance

 

If this sounds interesting and you think you have a viable property, please click link below to get started.

 

Get Started on an ADU