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What Are Accessory Dwelling Units?

Man holding a tiny model house in hand

Imagine a housing solution that creates more housing opportunities in communities, saves homeowners and tenants money, empowers seniors to be near family as they age, and makes use of extra space in low-density neighborhoods.

Imagine apartments built on top of garages and in basements, detached dwellings situated on large, spacious lots, and gorgeous tiny homes tucked away in established neighborhoods.

What you’ve just imagined are referred to as Accessory Dwelling Units (ADUs).

Types of Accessory Dwelling Units

You’ve likely heard ADUs called a myriad of names: granny flats, in-law suites, backyard cottages, secondary units, etc. There are four types of Accessory Dwelling Units:

  1. Interior: An interior ADU, also known as “Junior ADU”  is built within a preexisting home, usually as a renovated attic or basement.
  2. Attached: These ADUs share a wall with the existing home, but have a separate entrance and can be constructed to the side or rear of the home
  3. Garage: ADUs built in or on a garage unit are a great option for families that don’t want the hassle or cost of constructing an entirely new building.
  4. Detached: The sky’s the limit with detached ADUs. Built as a separate (usually much smaller) dwelling, they are popularly rented out to tenants or given as residences for elderly parents or medical dependents who might benefit from both proximity and autonomy.

Building Accessory Dwelling Units

Okay, so you’re excited to build on to your home, whether that’s to house grandma or make some extra cash, but you’re unsure about where to start. Good news! This next section is your one-stop-shop for all things ADU building!

The Cost

Unfortunately, there’s no calculator to determine how much you can expect to spend on building an ADU. The total will vary depending on a myriad of factors, such as: 

  • Any necessary demolition
  • Preliminary construction
  • Location
  • Necessary permits
  • Electrical and plumbing work to be completed
  • Safety measures to be implemented
  • Man power and hours of labor
  • Materials chosen and used
  • The size of the project
  • Any other elements that will impact your budget

It may be helpful to reach out to your local design and construction company for estimates and future direction.

The good news about cost: the land is free! You already paid for that. However, financing for ADUs is not readily accessible, as it’s not a popular enough project or investment yet.

Plan on getting creative. Homeowners typically should expect to spend upwards of $100,000. You can find some self-reported ADU development costs here. It will be important to think of your ADU as an investment, and not a “get rich quick” scheme for Airbnb.

Who Builds ADUs?

If you are lucky enough to be or to know a professional-grade carpenter or home renovator, you may be able to do a large portion of construction yourself. However, it is likely that you will need to hire a professional contractor at some point for elements of the project that are outside of your expertise (more on this later).

If you’d like to remain mostly hands-off during the ADU building process, you will want to have conversations with trusted contractors in your area to determine which company will be the best fit for your project needs. Find out if they are able to do all construction in-house, or if the company will need to hire out subcontractors for various steps, such as plumbing and electrical. If so, make sure you trust the partners they work with.

The Design

While your building team will likely be well-versed and knowledgeable about the best layout and design for the project you’re building, it will be important to advocate for your desires and vision early on in the process, so that everyone is on the same page.

For inspiration, try Pinterest or a Google image search for “Accessory Dwelling Units.” Pay attention to what you love and which designs will work well with the space you have or are wanting to build!

Keep in mind whom the end-user of your ADU build will be. Is this an investment property for future renters? Keep the design neutral and timeless.

Is it for an elderly family member to move into so he or she can be close to the grandbabies and receive help with day-to-day activities? Communicate that to your design team to ensure all included elements attend to those needs.

Is it for an adult child, going to college in the area? Consider keeping his/her opinion in mind during the process. Constructing an ADU is no small feat, so make sure all contributors are “doing it right the first time.”

Building Permits

It is absolutely essential, before you proceed with plans to build your ADU, that you find out what your local city government’s mandates and policies are regarding new building projects in your neighborhood. Each city and/or county has different laws regarding the size of your lot, where and what can be built in your neighborhood, and which permits, applications, and licenses are required.

This can be determined by a simple entry in an online search engine (Google), or a phone call to your local government office for applicable information and forms.

H3 Construction and Design

If you’re looking for an Accessory Dwelling Unit contractor who is experienced and trained in both construction and design in Northern Colorado, h3 Construction and Design is your team of trusted professionals. h3 specializes in constructing spaces that are innovative, useful, and unique.

We will ensure that all of your custom ADU building and remodeling ideas come to life. We specialize in working with clients within all reasonable budget ranges, and will help you choose a design plan that is both functional and gives your project an outstanding presence.

No ADU job is too big or too small; here at h3 we provide superior service to all our clientele. We also offer a range of design amenities including full-spectrum drawings with 3-D imaging that can help you realize your dream before we begin building or remodeling.


Reach out today to begin a conversation about your Accessory Dwelling Unit construction project!