What Most People Get Wrong About ADUs
ADUs are often described as small houses. That sounds reasonable, but it can create the wrong expectations before the project even begins. Homeowners naturally assume that a smaller building should mean a smaller budget, a bigger backyard should make construction easier, and converting an existing garage should always be cheaper than building something new. In reality, ADU development is much more complicated.
Here are four of the most common ADU assumptions—and what homeowners should understand before they start designing.
1. Smaller ADU = Cheaper ADU
This is probably the most common misconception. Yes, a smaller ADU will generally cost less overall than a larger one. But that doesn't necessarily mean it will cost less per square foot. Why? Because every ADU still needs some of the most expensive components of a house:
Kitchen
Bathroom
Plumbing
Electrical
HVAC
Water heater
Utility connections
Permits and inspections
A bedroom or living room is relatively inexpensive compared with a kitchen or bathroom. That's why a 400-square-foot studio can have a surprisingly high cost per square foot. You're concentrating many of the most expensive parts of a house into a very small footprint. Instead of asking, "What's the cost per square foot?", homeowners should first understand the total infrastructure and complexity required for their specific property.
2. Bigger ADU = Better ROI
Another common assumption is: If I'm allowed to build bigger, I should. Not necessarily. The best return on investment isn't always produced by the largest ADU. Location and tenant demand matter. A smaller ADU near a university, hospital, employment center, or coastal community may perform extremely well because renters are willing to trade square footage for location, privacy, and convenience. A larger ADU may generate more monthly rent, but it also requires more capital to design and build. The better question is:
Who is going to live in this ADU, and what does that person actually need?
Good ADU development isn't about maximizing square footage. It's about finding the right balance between construction cost, rental demand, lifestyle, and long-term value.
3. Bigger Backyard = Easier ADU
A large backyard looks like the perfect place for an ADU. But there's something homeowners can't see by simply looking at their yard: Infrastructure. Every ADU needs utilities. The farther your ADU is from existing sewer, water, electrical, and other connections, the more expensive the site work can become.
Long utility runs can mean:
More trenching
Deeper sewer lines
Concrete demolition and replacement
Electrical upgrades
Landscape restoration
Additional work near the street or public right-of-way
Sometimes a smaller backyard with convenient utility access can be much more economical than a huge backyard with difficult infrastructure. So instead of asking: "Is my backyard big enough?" Ask: "How efficiently can my property support another dwelling?" That is a much better starting point.
4. Garage Conversions Are Always Cheaper
This one surprises many homeowners. The garage already has a foundation, walls, and a roof, so converting it into an ADU should be cheaper than building from scratch. Sometimes it is. But not always. The important difference is that a garage was originally constructed as non-habitable space. An ADU is a home. That means the converted structure may need upgrades involving insulation, energy efficiency, electrical, plumbing, ventilation, fire safety, windows, waterproofing, and structural components. The existing slab can create additional problems. Older garages may have cracked or uneven concrete, low floor elevations, drainage issues, or foundations that require significant modification. Once you start opening walls, you may also discover conditions that weren't visible during the initial inspection. That's why a garage conversion can sometimes become closer to a reconstruction than a remodel.
Sometimes Starting Over Costs Less
It sounds counterintuitive, but there are situations where demolishing an old garage and building a new ADU can actually be more economical. New construction eliminates many unknown conditions. The foundation can be designed correctly from the beginning. Floor elevations can address drainage. Structural systems can be optimized. Energy requirements can be incorporated into the design rather than retrofitted into an old building. The objective shouldn't always be to save the existing structure. The objective should be to protect the overall project.
The Most Important ADU Decision Happens Before Design
The biggest ADU mistakes usually don't start during construction. They start much earlier—with assumptions. Before deciding on the size, layout, location, or type of ADU, you should understand your property. Where are the utilities? What are the site conditions? What type of ADU makes sense? Who will eventually live there? What are you trying to accomplish financially or personally? Those answers can completely change the project you should build. At Plus Home, we believe the best ADU isn't necessarily the biggest, smallest, or cheapest one.
It's the ADU that best fits your property, your goals, and your lifestyle.
Find Out What ADU Makes Sense for Your Property
Before spending thousands of dollars on plans, start by understanding your property and your goals.
Complete the Plus Home ADU Scorecard to take the first step.