There was a time in America that you could build as many homes on your property as you wish. However, with the beginning of zoning laws, extra houses meant permits and regulations.

Luckily, ADU (accessory dwelling units) are on the rise again as more states realize their benefits to home-owners and their communities.

If you have ever thought about adding an addition to your property you should know what is an ADU and how it affects the housing market.

Read on to find out more.

What is an ADU?

Otherwise known as a granny-flat or in-law apartments, an ADU home consists of a separate building on the same land as the main home. These additional units are are smaller homes but usually use the same utilities like water and electricity as the primary home.

Since they serve as an extra dwelling, they offer families a place to live cheaply and as extra income for homeowners to lease renters.

Many states are loosening the laws surrounding ADUs with the use of permits and inspections as well as limiting the number of homes allowed. However, some states and major cities like Chicago have outlawed them.

Makes Housing More Affordable

Overall, more people are seeing the benefits of ADU homes as a reliable way to create more affordable housing options. Most homes are tiny, taking up less space and requiring less maintenance. Plus, these homes have low rent or available free of cost when used for family members.

After the initial cost of obtaining permits, there isn’t must cost to keep an ADU on your property, making it cheaper than buying or renting a separate building.

Constructing the home is also less expensive as homes are often pre-fabricated. You could call ADUs tiny homes as they are minimalistic. This means they are eco-friendly and don’t require high energy.

Becomes Part of the Property

People use the ADU acronym because it means the home is an accessory, not a separate dwelling. It is part of your property and is considered part of your home’s value.

This means an ADU can’t be sold separately. It can only be sold and valued when you sell your whole property.

With more living space and tenant options, the value of homes increases, giving a boost to the housing market. This is especially true as more families choose to move in with relatives, seeking cheaper living accommodations.

No Need to Build on New Land

Since you define ADU as an additional home on your existing property, no new land is necessary. This eliminates the cost of buying the land, which is often the most expensive part of purchasing a new home.

Property tax also stays the same, eliminating the need to pay multiple property and land taxes if you own more than one house.

Other good news is that most people have unused, extra acreage already on their land. If you want to make money using an existing asset then building an ADU is a simple solution. There is no risk as you don’t have to make another investment in additional property.

More Houses Means a Stable Market

As a whole, the rise of ADUs means that there are more houses available for people. This creates living options, which equals a high surplus and low demand as there are more houses than people looking to buy.

The prices of homes on the market as well as rented domiciles go down or stay steady. That is because it is hard to compete with the cheap cost of building and living in an ADU. Plus, ADUs offer easy installation if you are looking to build your own home.

Adds Aesthetic Value

A lot of extra land on your property might be filled with unsightly and unmanicured shrubs or filled with unorganized lawn equipment.

Using to add beauty to your home is another benefit of ADU. There can contribute to a unique landscape design that takes advantage of space. Create pathways and dividers that unify your main house with your ADUs through design while offering privacy.

A well-designed yard also brings value to your home and property. It may look like a community in itself rather than a backyard.

The design of the interior of your ADU also gives you an opportunity to boost the value of your home.  Small, inexpensive homes give you the creative flexibility to design the tiny house you always imagined. If you are using your ADU as a rental then you can turn it into a guest retreat that will have your visitors wishing to come back.

Help People Pay Their Mortgage

No matter if you have family stay in your ADU or you use it as a rental unit, they help you save money. Extended family can contribute to your mortgage, ensuring that fewer people default on home loans. Rent payments are added to your income, giving you flexibility for spending and paying bills.

Both options equal more security for homeowners and decrease the chances of a market crash.

It allows people to save money to eventually purchase their own home. When renters pay less for their home they can save money for buying a home in the future. This safeguards the housing market for the next generation of homeowners.

Getting Started with an ADU

Now that you know what is an ADU and how it can boost the housing market it is time to start planning yours. The first step is to ask your county’s housing department about permits, inspections, and rules surrounding ADU. You then want to consult a specialized contractor to build your ADU according to the state’s building code.

Check out the Real Estate section for more news about ADUs and construction tips.