Remember the guest house Will Smith stayed in on Fresh Prince? That was a pretty cool setup, right? Here’s something even cooler: you don’t need a mansion in Bel-Air to get the perks of a guest house.
With the help of a trusted general contractor in Gilroy, CA, homeowners across Santa Clara County can build accessory dwelling units (ADUs) to bring in extra income and create flexible space for family or guests. If you’re asking yourself, "Do ADUs increase property value?" the answer depends on the type you build and how you use it.
Learn how ADUs affect your property’s value, what makes some types more valuable than others, and why working with a contractor like Michael Marini Construction simplifies the process.
What Is an ADU?
An Accessory Dwelling Unit, or ADU, is a complete living space built on your property alongside your main home. It includes its own entrance, kitchen, bathroom, and sleeping area.
ADUs are legally permitted structures that function as independent residences. You can build a detached unit in your backyard, attach one to your existing home, or even convert your garage into a livable space.
But do ADUs increase property value? Yes! Homeowners often use ADUs to earn rental income, give guests a place to stay, or provide private housing for family members.
Each type of ADU increases the usefulness of your property in a different way while adding long-term value.
How Do ADUs Add Property Value?
The type of ADU you build, its size, and how you use it all determine how much value it adds to your property.
Detached ADUs Add the Most Value
Do ADUs increase property value? Yes, and detached ADUs add the most value because they increase your total square footage with a fully separate living space.
Appraisers treat them as independent homes, which means they count the entire structure when calculating your property’s value. This added space boosts resale prices and appeals to buyers looking for rental income potential or multi-generational living.
In desirable areas, a well-built detached ADU can raise your property’s value by $500,000 or more, depending on location, size, and design.
Attached ADUs Add Value While Maximizing Your Existing Space
Attached accessory dwelling units increase your livable space but usually add less value than detached units. Since they connect to your home, zoning rules limit their size to 50% of the existing structure. Appraisers include this added square footage in your total home size but not as a separate unit. That limits rental potential and reduces flexibility for buyers.
Attached ADUs still raise property value, but the impact stays lower because of privacy concerns, space restrictions, and limited use cases.
Garage Conversions Add Value With Some Tradeoffs
How do ADUs increase property value? If it's a garage conversion, you'll turn existing square footage into livable space.
These units don’t expand your home’s footprint, and appraisers adjust for the lost function of parking or storage. Since you reuse the existing garage structure, the project involves fewer materials and less structural work, but design options stay limited.
The final appraised value depends on how much buyers in your area value parking or storage compared to added living space.
Other Benefits of Adding an ADU to Your Property
When you build an ADU on your property, you create rental income potential through long-term or short-term leasing. A legally permitted unit improves your property’s value and causes a noticeable home equity increase, both of which have a significant property appraisal impact. In Santa Clara County, strong real estate market trends favor homes with added space and flexibility.
Your unit also delivers a measurable return on investment (ROI). In many cases, the value added to your property exceeds the total construction cost, especially with detached units. You can also recover your investment through monthly rent. For example, a detached ADU that costs $300,000 to build might add $500,000 or more in resale value while also generating $2,500 to $4,000 per month in rent, depending on size and location.
Call Michael Marini Construction To Start Your ADU Project Today
ADU construction adds rental income, builds equity, and turns underused space into something valuable. Our team at Michael Marini Construction brings over 20 years of experience and handles everything, including property evaluation, custom design, permits, and construction.
If you're still asking yourself, "Do ADUs increase property value?" after reading through this guide, call Michael Marini Construction at 408-310-8732. We’re more than happy to explain exactly how you can benefit from building the right ADU on your property.
