Should I build a basement ADU?

[Bob Ross]

I want to finish my basement to get more living space, but also to increase the value of my home. I was thinking to make it into an ADU with a bathroom and kitchen and then either rent it out or just use the space as an extension of my house. Would have it be an official ADU make my house more valuable than simple finishing the basement and adding a bathroom, bedroom and kitchenette in the basement? Also if it's an a Adu, would be current 3 bedroom 2 bath then be considered a single family 4 bedroom three bathroom house?

thank you 

[David Krulac]

@Bob Ross There are 3 different aspects to consider. One is legal around here some local governments don't allow ADU at all, some have restrictions like the ADU can only be rented to a relative like a "mother in law suite", one local rule is that it must be attached to the primary dwelling, and some areas have few if any restrictions.

Second issue is "basement" units or even basement bedrooms.  Most codes require egress windows in all basement bedrooms and all basement units.  Not a problem if your basement is above grade.  But if your basement is below grade, constructing an egress window is costly.  By definition an egress window must allow free passage through the window, when opened for a fire fighter fully equipped including with air tank.  There are requirements for the size of the opening as well as the maximum window sill height. (must be low enough that a child could climb without a stool or ladder inside.)  Most basement windows are way too small and way to high to meet code. 

The third issue involves return on investment.  I've bought and sold over 1,000 properties for my own inventory and have NEVER finished a basement.  I've owned properties that had basements finished by prior owners.  Standard Appraisal requirements are that basement square footage is NOT to be counted in the building square footage if any part of the basement is below grade.  If on 3 side the basement is fully above grade and on the 4th side is even only 1 foot below grade the basement finished space is not added to the square footage of the building.  While the footage is NOT added, there is value added for finished space below grade.  In reality basements are often dark, musty, moldy, damp and water prone, which makes them less desirable to the buying public. imho, be cautious on how much you spend, because your return on investment of below grade space may be less than you expect.