ADU Building and Planning FAQs
Let us answer some of our most frequently asked questions for you!
Don’t let bureaucracy and legalese scare you away from your next ADU building project. With hundreds of ADU buildings completed for our customers, we have the answers to your most pressing questions about every stage of the process—from pre-approved ADU plans for San Diego to ADU permitting and designs.
The options for your ADU building will depend on the limitations of your property and the unique ordinances for your local jurisdiction. Even if you choose pre-approved ADU plans for San Diego, you’ll still need to do more than choosing a plan to obtain the right permits and customize the plans to your property.
Generally speaking, there are four options for an ADU building. First, there is the classic detached accessory dwelling unit, which can go up to 1,200 square feet. Second, there’s the attached ADU, which can measure to 50% the size of your existing home’s square footage. Third, there’s the garage-converted ADU, which can be a faster value-add for your home. Lastly, you can add or convert a second story or basement into an ADU.
We highly recommend doing a feasibility study with us before jumping into an ADU project.
Instead of focusing on how big you can make your ADU, the right question to ask for your ADU building is: what is its ultimate purpose? It’s a common mistake to go big just because you can. ADU Geeks can help you balance the space’s intended use with your budget and your desired monthly income from the ADU.
A general rule of thumb is that anything less than 300 square feet will allow for a studio ADU. A one-bedroom ADU is usually between 400-600 square feet. Larger than 700 square feet will allow for an ADU with 2 bedrooms or more.
Stick-built and prefab refer to the two main ADU building techniques.
A stick-built ADU is simply one that is built completely onsite with materials that are brought in. It doesn’t necessarily mean the ADU is built with sticks.
With a pre-fabricated ADU, the structure itself is built offsite and then shipped to your address. The result is a cleaner, faster construction process on your property. The only onsite construction that is needed beforehand is trenching, utilities, and foundation—which is then followed by prefab installation and finishing touches. Please note that ADU Geeks is not currently able to support the prefab ADU process from start to finish.
In addition to stick-built ADUs, ADU Geeks offers repurposed storage containers that are already permitted by the state of California.
A stick-built ADU has the flexibility to be whatever size and shape you want. It usually has a higher resale value as well. The downside is that it usually takes longer to build and is more costly than a prefab ADU.
Prefab units are more affordable and faster to build, but you’re limited in size and shape in most cases. The resale value is usually not as high as a stick-built ADU.
Your ADU building will be assessed for property tax purposes, but it will not trigger a reassessment of your main house’s value. In the end, your property will have a mixed tax assessment.
Generally, property taxes are approximately 1% of the property’s value. So if your ADU is valued by the tax assessor at $120,000 then the yearly property taxes will be $1,200. If you spread that over twelve months, then your property tax will only be $100 each month.
Generally speaking, you can depreciate the cost of the ADU over 27.5 years if you rent it out. Currently, 100% bonus depreciation is offered to all personal property and land improvement assets. However, you cannot depreciate the value of the land your ADU is built on. In order to accelerate your depreciation you’ll want to have a certified cost segregation study done.
Note: Do not rely on any computer-generated cost segregation report produced without an in-person physical inspection. ADU Geeks can help you with the required cost segregation study to accelerate your ADU depreciation. Contact us today.
How you handle expensing or depreciating your ADU building investment should be decided in consultation with a professional to determine what’s right for your circumstances.
A cost segregation study is a process in which every tangible part of your ADU is separated into categories by a certified cost segregation engineer.
Without the cost segregation study, you can depreciate the total cost of your ADU over 27.5 years beginning the day you put your ADU into service. This will cause your ADU to depreciate slowly.
A cost segregation study allows you to categorize your ADU expenses into the proper useful-life categories. Since many parts of your ADU won’t last 27.5 years, the IRS allows you to accelerate the depreciation of items based on their expected lifespan. This allows you to expense things in 5, 7, and 15 year buckets, offsetting your business rental income to reduce your yearly tax burden.
Can ADU Geeks do the cost segregation study required to accelerate the depreciation on my ADU building?
ADU Geeks is uniquely prepared to perform the cost segregation study. Our founder has a Master's degree in Taxation from the University of San Diego and worked for years at Ernst & Young as a Tax CPA before starting ADU Geeks. We will help you determine if a cost segregation study is right for you and handle that process if it is a fit. Schedule a free consultation today.
Location plays a large part in how much rent you can charge for your ADU. There are many free websites available to search for the rental market in your local area. If you’re hoping to rent out your ADU to help lower the cost of ownership and create a source of income, understanding the local rental market will help you set the right budget for your project.
Financing Your ADU
Each ADU building project is unique. The cost will depend on a range of factors:
- The type of ADU (attached vs. detached vs. garage conversion)
- The size of the ADU (lower square foot usually means lower cost)
- The type of construction (stick-built vs. factory built)
- The existing site conditions
- The quality of finishes you desire
On average, the cost to build in San Diego is $250 per square foot for a single-story detached or attached ADU, while garage conversions are lower ($190-$215 per square foot). Second story additions usually are the most expensive options, averaging between $300 to $350 per square foot.
When building an ADU, whether or not you’re using pre-approved ADU plans for San Diego, you’ll need to budget for both soft costs and hard costs. ADU Geeks will help you understand all of your costs from start to finish up front so you can plan accordingly.
Soft costs are any costs other than the physical costs of construction. These include design fees, building permit fees, impact fees, school fees, and water/sewer connection fees. In total, soft costs typically range from $10,000 to $20,000.
Hard costs are the actual cost of construction, including site preparation, demolition, trenching, grading, utilities, foundation, framing, plumbing, electrical, roofing, flooring, finishes, etc. Depending on your ADU type, hard costs could be around $250 per square foot.
There are several ways to finance your accessory dwelling unit including cash-out refinance, home equity line of credit, renovation loan, or even a personal loan.
Most loans rely on your credit score, your cash assets, and income. Depending on the type of loan you apply for, lenders will also consider the current and/or future value of your property.
Yes. Lending caps depend on the type of loan you’re interested in and where you live.
Our team of experts can help you plan for all the normal costs of building an ADU in San Diego, including design fees, permit fees, cost of construction, type of financing, and the logistics/timing of the financing becoming available during your ADU project.
ADU Geeks can help facilitate a personal loan of up to $100,000 (apply here). We also have preferred lenders who can easily finance your ADU project at low rates with repayment terms up to 30 years, depending on your qualifications. Contact us today for more information.
Designing Your ADU
ADU Geeks can design your ADU building any way you would like (as long as it meets the zoning requirements). Our design team consists of draftsmen and architects. Combined, they have over 30 years of experience, which is more than enough to help you with your ADU project.
ADUs do not require architects. In California, structures that are not taller than two stories can legally be designed by a draftsperson. Technically, you yourself could design the blueprints necessary to obtain building permits, but we don’t recommend that for most people.
It’s important to note that in rare cases HOAs may require a licensed architect to sign off on residential projects.
An architect and draftsperson vary in several ways. Architects often have 5-7 years of formal education and experience. They are visionaries who can provide a level of detail that the average draftsperson cannot. However, this experience comes at a cost. Architects usually charge a minimum of $7,500 to $10,000 for ADU drawings. Since ADUs are less technical than other building types, an architect’s skills may be overkill for your project.
A draftsperson can utilize Computer Aided Design & Drafting (CADD) technology to translate your vision into the necessary blueprints that meet the requirements to obtain a building permit. For all ADU projects, a draftsperson is more than qualified to complete the drawings. On average, a draftsperson will charge $4,500 to $6,000. ADU Geeks’ draftsmen are here to help. Contact us for a free consultation.
It takes six weeks to draw a complete set of ADU plans detailed enough to obtain your building permit. Your plans will include multiple pages. At a minimum, there will be a site plan, floor plan, elevations, Title 24, electrical plan, foundation plan, framing plan, and roof plan. Though it’s not always, your plans may also need structural engineering calculations.
Pre-approved plans for San Diego are a viable option, but they’re not one-size-fits-all. Every property’s unique characteristics will need to be addressed in the plans, meaning the City of San Diego’s pre-approved ADU plans will only get you about 70% of the way there.
ADU Geeks can help you address the missing details needed to obtain the building permit for your project. Get in touch today.
Under the Title 24 Building Standards Code, all new construction in California requires solar. Detached ADUs and above-garage ADUs do require solar power. Junior ADUs, attached ADUs, and garage-converted ADUs do not require solar, however. ADU Geeks can help you determine the solar requirements for your ADU project—contact us for more information.
Permitting and Building Your ADU
Depending on your area, certain fees may be waived. San Diego County, as an example, is currently waiving building permit fees for ADUs.
Yes. We will navigate the permit process with your local municipality.
Our preferred General Contractors are fully vetted, licensed, insured, and bonded with a long record of building residential homes.
Building yourself is a great way to keep your project expenses down. We can design the necessary plans and help you obtain the required building permits. The county/city will see this project as an “owner builder” project and you’ll need to carry the necessary insurance and workers' compensation throughout the construction phase.
You are free to use your own subcontractors where appropriate to keep costs down. Just keep in mind that the General Contractor cannot warranty anything that they did not do. In our experience, cheaper on the front end often ends up being more expensive in the long run.
Every ADU project is different, but the average ADU building takes between 9-16 weeks to construct. This excludes the time it takes for design and permitting prior to construction. Each trade needs time and space to perform their tasks and they cannot all be done in parallel. Additionally, the county/city has to perform inspections at various stages of the construction phase, which contributes to the lengthy timeline.
Your stick-built ADU will be guaranteed for 10 years on average.
Yes. At ADU Geeks, we even have several designs that are already permitted at the state level. Ask us about our state-approved ADU container modules.
Leasing Your ADU
There are several factors to consider when it comes to estimating the potential rental income for your ADU building. The quick and easy way to figure out rental price is to compare rental units in your area that have the same number of rooms and bathrooms. ADU rentals can range from $1,200 to $2,500 or more per month depending on amenities, size, and location.
Cash flow is your remaining income after expenses. For most people, this will be your rental income from the ADU minus the monthly financing payment.
The easiest way to calculate the return on investment (ROI) for your ADU building is by dividing your annual net profit by the total cost of your ADU. Your net profit is the amount of money you have after paying any/all expenses (mortgage payment, maintenance, etc). The total cost of your ADU is the soft costs plus hard costs (and financing costs if applicable).