what is adu in real estate

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Nature

An Accessory Dwelling Unit (ADU) is a secondary house or apartment that shares the building lot of a larger, primary home. It is a smaller, independent residential dwelling unit located on the same lot as a stand-alone single-family home. ADUs are also known as in-law or mother-in-law units, secondary dwelling units, granny flats, or carriage houses. They can be attached to a house or garage, or built as a stand-alone unit, but they generally make use of the water and energy connections of the primary house. ADUs usually have their own kitchen, living area, and separate entrance. They can be used to house a family member or for additional income through rent.

ADUs can be converted portions of existing homes, additions to new or existing homes, or new stand-alone accessory structures or converted portions of existing stand-alone accessory structures. They can be attached or detached from the primary residence. Detached ADUs are standalone units that stand on the same lot as a larger dwelling on a property. Examples can include a carriage house or a converted outbuilding such as a granny flat or bungalow.

ADUs can increase housing affordability, create a wider range of housing options within the community, enable seniors to stay near family as they age, and facilitate better use of the existing housing fabric in established neighborhoods. They can also add value to the property. However, constructing an ADU could increase a homeowner’s tax bill, possibly eliminating a significant amount of the profit. The housing and rental market varies significantly by both state and city.