Small home

Top reasons to add an accessory dwelling unit to your home

Look at the rising trend of accessory dwelling units and check out tips to help you decide if one of these small homes is right for your big plans.

What is an accessory dwelling unit (ADU)?

An accessory dwelling unit, or ADU, is a smaller house or apartment that shares the building lot of a larger, primary house. They are also commonly referred to as granny flats, in-law units or casitas. Their design can vary – from a converted garage or basement to a backyard cottage or a loft above a garage.

Economical in size and cost

One of the most attractive features of ADUs is their size. These micro-dwellings don't take up much space, making them ideal for urban areas where real estate is at a premium. But it's not just the physical space that's economical. Constructing an ADU can be significantly less expensive than buying a larger home or moving to a new property altogether.

Why consider an ADU?

Even if you're not currently facing changes in the number of people living with you, there are several reasons why adding an ADU to your property might be beneficial:

  • Rental income. An ADU can serve as a lucrative rental unit, offering homeowners an additional stream of income.
  • Increased property value. Adding a secondary dwelling can boost your property's overall value.
  • Flexible living arrangements. ADUs can accommodate visiting guests, college-going young adults or elderly parents.
  • Sustainability. With their smaller footprint, ADUs often use fewer resources to build and maintain.
  • Work from home space. For remote workers, an ADU can serve as a quiet, dedicated workspace.

The ADU trend: beyond family needs

While the immediate thought around ADUs often revolves around housing aging parents or returning adult children, the ADU extends far beyond family. Urban areas faced with housing shortages are now looking at ADUs as potential solutions. By adding more living spaces on existing properties, cities can efficiently increase housing without the need for larger development projects.

Taking advantage of the ADU trend

If the idea of an ADU intrigues you, here's how you can get started:

  • Research local regulations. Before you dive in, familiarize yourself with local zoning laws, ordinances and building codes related to ADUs.
  • Consider your needs. Is this for family, rental income or personal use? Design accordingly.
  • Hire professionals. From architects to builders, acquire a team that understands ADUs.
  • Consider financing options. Some areas offer special financing or incentives for ADU construction, so look at your options.

Small but mighty

Accessory dwelling units are no longer just a “tiny house” in your backyard. They represent flexibility for your life, and the evolution of modern housing needs. Whether you're preparing for your in-laws, seeking an additional income source, or just wanting a separate space, the ADU trend is worth exploring.

If you decide to add an ADU, take time to discuss your homeowners insurance needs with your local insurance agent.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

State Farm Fire and Casualty Company­
State Farm General Insurance Company­
Bloomington, IL

State Farm Florida Insurance Company
Tallahassee, FL

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Richardson, TX

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