An ADU (accessory dwelling unit) is an extra living unit, built right on your property, that you can either rent out to tenants or use for your needs.They can range in size from a 150 sq. ft. studio apartment to a unit as large as a 1,200 sq. ft. house. It’s all up to how much space you need, the zoning in your area, and the size and shape of your lot. ADUs come in a variety of building types, such as:

Interior — An interior ADU is constructed from existing, non-livable space in your home (think a basement or an attic).

Garage Conversion — Park your car on the street and convert your garage into an ADU. The average 2-car garage is usually about 400 sq. ft. That gives you plenty of space to convert it into a 1 bed, 1 bath studio apartment.

Above-Garage — With the above-garage option, you can keep your garage and construct an ADU unit above it, complete with its own separate entrance.

Attached — An ADU with at least one wall attached to your primary residence. A bit like adding on to your home.

Detached — An ADU separate from your primary residence; a completely separate building in your backyard or farther, depending on the size of your property.

Your ADU can be a single-story or a multi-story unit. It can have one bedroom or multiple. It all depends on the zoning in your area and what you’re looking for in your new living arrangements. So, now that you’re up to speed on the types of ADUs you can build, here are some of the reasons why aging in place — and on your own property — could be the best option for you.

Downsizing might be the most common reason why folks choose to leave their home.
As we age, it can become more and more difficult to keep up with a larger home, and even more so if that home has stairs or lacks accessibility features that can make things like taking showers or accessing your backyard harder than they need to be.

This is often why some seniors pack up and move to an apartment or a smaller home once maintaining their home becomes too difficult.

With an ADU, you can downsize without having to go anywhere.

Design your own retirement home right in your backyard. Customize it to your exact specifications and outfit it with any accessibility features that you need to make your life easier.

You’ve earned it, after all.

With a new ADU, you can keep your original home and live in comfort on your property, giving you the opportunity to enjoy all of the privacy and autonomy of living in your home, while still reaping all of the benefits of a smaller space.

And once you’ve moved out of your larger home, then that brings us to the next benefit …

Once you’re comfortably situated in your smaller ADU, you’ll have an entire empty house to think about.

So, why not turn that big, empty house into your biggest resource?
It’s no secret that California is in the midst of a housing crisis. With so many residents and so few places to live, any new property on the market is going to be a dream come true for some lucky tenants.

There are plenty of young families out there that will be more than happy to rent your home, giving them a much-needed place to live and providing you with rental income every month.

And renting an entire home is sure to bring you more income than renting a room or efficiency condo.

With your new income, you can pay quickly pay off your ADU, fund another ADU project, provide for your family, or just treat yourself to a well-deserved vacation.

It’s your money and, as long as your original residence stays occupied, it will come to you every month.

And if you don’t want to rent out your home, you can always make it available to some friends and family. This gives you the joint benefits of having someone that you trust maintaining your larger home for you, while also providing you with loved ones close at hand should you need assistance. No one wants to admit it but, as we age, we will need more help with things that used to come easily to us. With loved ones staying nearby, you can have the help you need without the inconvenience of the long drive that separated you before. Additionally, having loved ones living in your larger residence can give you the peace of mind that your beloved home is being cared for in the way you’d want it to be.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.