Build a Prefab ADU or not? Can this affect equity of the house?

3 Replies

I'm in the process of purchasing a SFR 3bd/3ba with a lot size over 7,500 sq. ft.

The idea is to build an 800 sq.ft. ADU/Granny unit on it. The ADU will generate a rental income of 2,000 a month.

The cost to build an ADU unit in California is about $200 per sq. ft about $160,000 cost

There is also the alternative to install a prefab unit made of storage containers and the cost for the same sq. ft. is $100,000.

Both alternatives will generate the same rental income of $2,000 a month.

If I decide to sell the house in about 5 years, having a prefab unit will not increase the value of the property as much as if I have conventional construction unit?

What are your thoughts of what type of construction to do?

Spend less on building a prefab unit or go for the conventional construction to get a better sales price when I’m ready to sell the house?

Thank you.

MB

I would not go with literal storage containers but prefab or manufactured homes aren't the worst idea, storage containers are a very edgy look that doesn't appeal to everyone whereas there are a lot of decent looking manufactured options these days.

@Mayra B. I haven't seen any of the prefabs in person yet, but in photos they look amazing. I don't see a reason why a prefab would fetch a lower price than a stick build. To me it looks like a more cost efficient means of construction utilizing labor in a less expensive market to build in a more expensive market.