MIGHTY BUILDINGS BLOG

How ADU’s Can Increase Your Property Value

Whether you call it an ADU (Accessory Dwelling Unit), a granny flat, or a guest house, there is no doubt that they add tremendous value to your property. However, with the recent turmoil seen by the launching of the SB 9 bill in California, we cannot help but wonder what impact it may have on Colorado Springs property.
Let’s learn more about ADU’s, California’s SB 9 law, and find out whether fair Colorado Springs has something similar to help savvy investors increase their property’s value.



Addressing the housing demands.

California’s divisive SB 9 law came into effect to help alleviate the housing problems faced by the state. Simply put, quality housing is in short supply in California. 
Today, the SB 9 law allows homeowners to construct a second house on the same property with far fewer zoning regulations.
Since real estate space has become such a high-demand commodity, this should, in theory, allow for more housing options to open up in the state. California isn’t the only state that is experiencing a real hunger for quality housing. 
Colorado Springs real estate market statistics show an upward trend with no sign of stopping. Luckily, Colorado Springs has been one step ahead of this demand from the start.
The Colorado Springs Office of Building and Development allows attached ADU’s to be constructed in single-family residential zoning districts. Detached ADU’s are allowed in two-family and multi-family zoning districts. The new accommodating zoning regulations in Colorado are a welcome relief and will prevent a short housing supply.
Property owners will have an equal opportunity to provide semi-independent housing. This second building could then be used as a great investment opportunity.
ADU’s are great for creating space on your property. An additional housing unit opens up the doors to extra income for homeowners.




There are two recognized types of ADU’s.

Let’s look at ADU’s and which types are recognized by the Colorado Springs Office of Building and Development department. 
Two basic types of ADU’s have been allowed in Colorado Springs since 2003. The first type is the attached unit. As the name applies, this extension is connected to a single-family dwelling. Your typical converted garage or basement will fall into this category.
Detached ADU’s are more modern. They tend to be pre-built structures or modular guest houses. The important thing is that they are detached from the main building. A detached, converted garage is an excellent example of this type of ADU.
While Colorado Springs has recognized both types since 2003, it has only been recently that the state has opened up more zoning districts. The newly included zoning districts make it easier for the average homeowner to construct an ADU on their property. So, why would you want to construct an ADU on your property?

An ADU on your property is a sound investment.

An ADU on your property can be a great additional source of income. With an ADU, you can rent out the property. This passive monthly income is attractive to many homeowners. It could even increase the resale value of your home by as much as a staggering 50 percent. 


Naturally, you will have to find out what the property market is like in your area before investing in an ADU. The easiest way is to check local listings to help determine whether you will recover the costs of constructing an ADU with several years of rental income.

Some other things to keep in mind.

Comparing your projected expenses with the possible earnings is only one thing to keep in mind. You will also have to look at the effect that the ADU will have on your main building. 
Try to keep styling similar and incorporate the ADU so that it is non-disruptive to the main house. A poorly planned ADU can quickly devalue your property, and this will make it challenging to sell it.

Our final thoughts.

An ADU is an excellent investment, especially if it is well-planned. There’s a definite market with actual demand for it. Even state boards are opening up zoning restrictions to allow for more ADU’s to be constructed. 
This sound investment will go a long way to providing you with an additional income, and it will even increase the value of your property.



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