Q: I have some unused space in my backyard and have been considering building an ADU for extra living space for guests or rental income, but I don’t know all the ins and outs. What do I need to know before getting started?

A: ADUs, or “accessory dwelling units,” have become increasingly popular over the last decade. Both attached and detached ADUs provide extra living space and can even offer homeowners much-needed passive income. In densely populated cities like Seattle, ADUs have provided some relief from the affordable housing crisis. Today, Washington state allows homeowners with sufficiently sized lots to build up to two 1,200 square foot ADUs.

Here are some things to consider before embarking on an ADU for your home.

1. Determine who is going to use the ADU

There are two common types of accessory dwelling units: attached and detached ADUs. An attached ADU shares one or more walls with the main residence, whereas a detached ADU is an entirely separate building. A JADU (junior accessory dwelling unit) is a type of attached ADU that does not require a separate kitchen or bathroom.

An attached ADU might work perfectly if your goal is to move elderly parents into the ADU or provide them with a live-in caregiver. Similarly, an attached ADU can give teenaged or young adult children independence without entirely eliminating supervision.

A detached ADU might be better if you hope to make passive income off a short- or long-term rental. Some cities still offer special loans, grants and other financial assistance to homeowners hoping to build ADUs or JADUs in high density areas. Whether your intentions are altruistic or not, building an attached or detached ADU could provide you and your family with passive income.

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Regardless of who will be using the ADU, rest assured the ROI is significant. An article published in Realtor magazine late last year found that “ADUs can add 35% to [a] home’s value.” Referencing data collected by Porch.com, the magazine notes that homes with ADUs listed in “the largest cities” are priced “35% higher on average than a home without one.” Attached ADUs, sunroom additions, kitchen additions, bathroom additions and primary suite additions also increase property value. The return on investment for these types of projects could exceed 80% — adding between 5% and 30%.

Keep in mind that detached ADUs are typically more expensive to design and build but offer both renters and property owners far more privacy. Before designing the space, taking out loans or applying for permits, pin down exactly how you will use the ADU. This will impact what you can build, what you choose to build and how you will build it.

2. Research city and county ADU requirements

While ADUs are now fairly common across Washington state, your neighborhood might have its own rules. In 2021, the Snohomish County Council altered existing ADU regulations in urban, suburban and rural areas of the county. Property owners can now have one attached ADU and one detached ADU per single family lot. Of course, the lot must be large enough to accommodate both units while observing setback requirements.

Some areas do not allow ADUs, while others restrict how you can use ADUs. For example, homes in gated communities are often required to match the appearance of their ADU to the original house. Other requirements include ensuring extra off-street parking as well as adequate on-site utilities (think water and sewer).

3. Hire a design-build remodeler before buying ADU plans

When planning an ADU, some homeowners opt for a prefabricated kit or plan. These ready-made kits and architectural drawings can cost quite a bit less than commissioning custom plans. However, these kits and plans are not designed to meet your local county permitting laws. Homeowners who buy these plans must still have prefab plans customized to local building requirements. Working with a Design|Build Remodeler with expertise building in your county eliminates these redundancies, thereby saving homeowners valuable time and money.

Whitney Harsh is the project developer at VanderBeken Remodel, a member of the Master Builders Association of King and Snohomish Counties (MBAKS). If you have a home improvement, remodeling or residential homebuilding question you’d like answered by one of MBAKS’s more than 2,600 members, write to homework@mbaks.com.