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Are ADUs and tiny homes actually worth the investment in 2024?

real estateinvestingADUtiny homes
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Martin_O
Joined:
31.05.2022
Posts: 1830
Topic Starter
31.01.2025 05:01
I have been looking into adding an ADU to my backyard to generate some rental income, but the construction quotes I'm getting are surprisingly high. I'm worried that with rising interest rates and material costs, the ROI might take way longer than I initially projected. Has anyone here actually gone through the process of building one recently, and did it end up being a smart financial move? I'm also curious if these units actually add significant resale value to the main property or if they are mostly just a headache for future buyers. I'd love to hear some honest experiences regarding the permitting process and whether the rental demand is still there.
17 replies in this topic
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Ameli_Z
Joined:
03.02.2023
Posts: 367
28.02.2025 09:33
Honestly, the construction quotes are insane right now. Unless you're doing a lot of the labor yourself, the ROI is looking pretty grim in this market.
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Iggy_R
Joined:
09.12.2020
Posts: 1789
12.03.2025 11:20
I built an ADU in 2022 and it's been a nightmare with maintenance. Definitely check your local zoning laws before you commit to anything.
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Zuzi_P
Joined:
03.02.2024
Posts: 747
21.03.2025 03:29
In reply to a previous post
To the OP, have you considered a prefab unit? They are usually cheaper and faster to install than stick-built, which might help your ROI calculations.
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Alan_K
Joined:
11.04.2021
Posts: 790
10.05.2025 07:38
I think it really depends on your location. If you're in a high-density city, the rental demand is still huge, but in the suburbs, it might sit empty.
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Fabi_W
Joined:
05.06.2021
Posts: 2384
04.07.2025 02:08
In reply to a previous post
Adding an ADU definitely increased my home's value, but the permitting process took almost a year. Be prepared for a lot of red tape.
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Zuzi_P
Joined:
21.01.2023
Posts: 2138
19.07.2025 12:51
I wouldn't touch an ADU project with interest rates where they are. You're better off putting that money into a high-yield savings account or index funds.
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ZlatnaRuka
Joined:
02.12.2024
Posts: 94
15.08.2025 13:48
In reply to a previous post
That's a fair point about the interest rates, but if you're planning to stay in the house for 10+ years, it might still make sense long-term.
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Iggy_R
Joined:
25.07.2022
Posts: 2220
27.08.2025 15:47
Don't forget to factor in property tax increases. My taxes went up significantly after I finished my build.
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star_vulk
Joined:
12.12.2023
Posts: 350
22.09.2025 22:48
In reply to a previous post
Are you planning on doing long-term or short-term rentals? Airbnb demand is cooling off in a lot of areas, so keep that in mind.
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Hubo_K
Joined:
17.09.2023
Posts: 370
18.11.2025 08:27
I just sold a house with an ADU and it was the biggest selling point for the buyers. It definitely adds value if it's done professionally.
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NeZnamNoPisha
Joined:
26.07.2022
Posts: 1714
25.11.2025 03:09
In reply to a previous post
I'm curious, what kind of quotes are you getting? Are they custom builds or modular?
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gost_nedelq
Joined:
28.10.2021
Posts: 2156
25.12.2025 08:13
The permitting fees in my city are almost as high as the foundation costs. It's a racket.
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Maks_D
Joined:
14.10.2021
Posts: 2293
24.01.2026 23:16
I think tiny homes are a fad, but a well-built ADU is a permanent asset. Don't cheap out on the foundation or the plumbing.
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grigor_b
Joined:
02.09.2021
Posts: 753
28.01.2026 19:00
In reply to a previous post
Totally agree with the previous poster. If you build it cheap, you'll just be spending that money on repairs later anyway.
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gost_nedelq
Joined:
10.08.2021
Posts: 1342
04.02.2026 04:57
If you can't find a contractor who is honest about the timeline, walk away. Most of them will underestimate the duration by months.
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Poli_H
Joined:
14.05.2023
Posts: 492
11.03.2026 09:51
It's a smart move if you have the space and the cash, but don't expect to get rich off it overnight.
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nov_tuk
Joined:
04.04.2022
Posts: 1857
18.03.2026 03:43
I'm holding off until 2025 to see if material costs stabilize. Everything feels way too inflated at the moment.

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