Financing & ROI
How much does an ADU add to home value in California?
An ADU adds 20–35% to California home value on average, with $1.05–$1.40 of appraised value per $1.00 of construction cost in primary metros. Coastal LA, Peninsula, and East Bay markets see the highest premiums; inland markets and small JADUs see less.
Appraisals weight the ADU as income-producing space when there's a comparable rental market. In areas with strong rental demand (Santa Monica, Berkeley, Oakland), appraisers use a 5–8% cap rate on actual or estimated rent.
Resale buyers value multigenerational space, home-office separation, and rental income optionality. Detached ADUs typically appraise stronger than conversions for the same square footage.
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Related questions
- • Does an ADU increase property taxes?
- • How do appraisers value an ADU?
- • Will an ADU help me refinance?
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