ADU/Pool house/Tiny Home valuation

[Olivier S.]

Hi there,

I am trying to assess what would be the added value brought by adding an ADU to my property.

Right now I am getting quotes between $300-375/sqft to build a roughly 450 sqft 1bed/1bath pool-house on my property in 78759.

The home itself appraises for around $500/sqft based on recent sales comps. 

I have asked one realtor who told me that based on current market, I should theoretically be able to value those extra 450 sqft at full price (ie. $500/sqft). 

I also found one recently sold listing near by who was adding the sqftage of the ADU in to the total property sqft and bed/bath count.

Any experience realtor / appraiser / investor in this forum who would be able to confirm this ?

Thanks for your help

[Celine Crestin]

The value add of the ADU will vary based on a number of factors, including location, if it's permitted, size, features (bathroom? no bathroom? kitchen? etc) among other things. Typically I see the ADUs marketed along with the house as additional, separate square footage (eg - home is 2000/sqft, additional casita 400/sqft).

What I would consider more so than long term appraisal value add, would be what present day value will you get out of the ADU based on how you will use it. Are you going to STR it? If so, what do your projected numbers look like for that? Will you make your money spent back in the first 1-2 years and do you plan to keep the property longer than that? Are you using it as a home office, or gym, or guest house and if so, is the usage of that space worth the cost to build?

You will certainly add value if done correctly. Hope this helps!