What is DADU in Real Estate? Is it a Good Investment?

Like many Americans you’re probably wondering what is DADU in real estate? The meaning of DADU is “Detached Accessory Dwelling Units”, they are small detached homes similar to a shed. It can contain a sleeping area, a bathroom, a kitchen, and living quarters that are often erected on plots with single-family residences. A DADU unit is often new construction. However, some homeowners choose to turn a garage or other outbuilding into a usable living area.

A DADU unit can be up to 800 square feet. It is usually located far enough from the primary house and the neighbors to provide seclusion. A DADU is becoming increasingly popular for family members to live in or rent out for extra cash, particularly in areas like Tacoma. People also call a DADU a backyard cottage. Many people appreciate the charming appearance of a smaller house unit for a short-term rental or separate in-law quarters.

When it comes to constructing a DADU, many homeowners wonder whether it is a smart investment. In a nutshell, it depends. Why are you thinking of constructing a DADU unit in the first place?

A DADU could be a great investment for you if you want to house your elderly parents but don’t want to pay for a retirement home. Retirement residences often cost $45,000 per year. Investing in a DADU may be a suitable alternative for you if you want to avoid handing over your parents’ bank accounts to a retirement community and never seeing the money again. Or if you intend to pass your home on to a family member, you may wish to consider building a DADU to house yourself after retirement.

If you want to boost the value of your property while also increasing your income streams, building a DADU may be a good idea. Assuming that local zoning regulations permit the construction of a DADU, you can construct a second structure with usable space on your present property. As long as it is visibly smaller than the main structure of the plot. You can use this structure as a rental apartment or a home office.

However, before selecting to create a DADU, you should always examine your budget and zoning requirements. It’s not worth it if your zoning rules prevent you from constructing a large enough DADU. A DADU needs to be large enough to serve the purpose you wish to utilize it for. Furthermore, a DADU can generate additional expenses for you. So if you don’t have the funds for it, it’s probably not worth it.

If you consider building a DADU, you can contact your local construction company. You can discuss your DADU project and see whether it is a good investment for you.