That’s Why It Pays to Work with an Industry Leader in This Highly Specialized Category of Real Estate Investment.
Just as real estate in general varies widely across the Bay Area, so does the cost to build an ADU. Scoping the cost of an ADU project can be complicated. There’s a right way and many wrong ways to do it. If the project is not evaluated correctly, it can be uncomfortably unpredictable.
Get ahead of the game by working with knowledgeable resources. ADU experts can walk you through each step of the planning and budgeting process so that you know ahead of time that you can ultimately reap the rewards that multi-family ADUs represent.
For starters, each of the general factors below are going to impact costs:
- City and Jurisdiction
- Type, Size and Placement of the ADU/s
- Design Specifics
- City Approval Process
- Building/Construction
How Location Impacts the Cost to Build an ADU
Not surprisingly, the cost to convert or build an ADU in San Francisco is likely to be the highest in the Bay Area. Using San Francisco as an example, according to the City of San Francisco, materials and labor costs alone will usually be more than $125,000. Architects and engineers are usually 10% of construction costs. City fees can range from 6%-9% of construction costs.
How the ADU Type, Size and Placement Impacts the Cost to Build an ADU
The various types of ADUs, such as the conversion of existing habitable space, the conversion of non-habitable space (e.g., a garage or basement), new construction, and more complex conversions of non-habitable space are at different ends of the cost spectrum. You might convert an area of a home for $100,000 or less, for example, while new construction projects and more complex conversions will be on the higher end and could potentially cost over $400,000.
Size matters: The number of bathrooms, bedrooms, and overall square footage will impact the overall costs. Most of the costs of any dwelling unit is the kitchen, bath, heat/cooling source and water heater. Many people get caught up in price per square foot. A 300 sq.ft. efficiency unit is going to have a higher cost per square foot than a similar two bedroom, one bath 1,000 unit since the costs are concentrated in the four item areas.
The age and location of your property will, of course, influence the cost, as will placement of the available space on your property and parameters of the space like accessibility and utilities.
Design Specifics and How They Affect the Cost to Build an ADU
Design will likely be influenced by all of the above. As a rule of thumb, design costs typically represent 10-20% of total project costs. Like other types of residential design, the more elaborate the design, the more expensive it will likely be.
Still, certain design elements become huge selling points in smaller spaces or those without adequate natural light. A designer who specializes in ADUs will be able to present solutions like skylights, or converting a garage door into a large window, that make the ADU more attractive to potential renters. Design elements like these will increase the value of your investment in the long run and can be worth the additional costs.
City Approval Processes and How They Play into the Cost to Build an ADU
Once you have a clear picture of your ADU project and have submitted an application and complete set of plans, it’s time to get your project approved. When you work with an ADU resource that has the right expertise and one that’s forged the right relationships, this step in the process should be streamlined so that revisions to your plans are minimal.
When you work with an ADU specialist that does things right from the beginning, it stands to reason that your plans get approved in less time. Less back and forth with local jurisdictions also means less costs associated with the approval phase.
Building/Construction and How They Affect the Cost to Build an ADU
Not surprisingly, this phase of the process takes up the largest percentage of the overall costs to build an ADU. The laws of supply and demand will also impact construction costs, so the timing of your project will also be a factor. In general, construction costs in the Bay Area fall with the $200-$400/square foot range.
As we saw during the pandemic, supply and demand for materials can also fluctuate a great deal. And then there are permit fees, which could run anywhere from 5-10% of the construction costs.
Before You Can Really Know the Cost to Build an ADU in the Bay Area, You Have to Understand What’s Feasible.
At Adapt Dwellings, we are an industry leader that does things right from start to finish. That’s why we begin each project with an Adapt Feasibility Study. We look at your project from every angle to ensure its viability – and profitability. We then develop a comprehensive financial analysis so that you can make the most informed decision about how best to proceed.
We believe that adding an ADU (or more) on your multi-family investment property is the fastest and most secure way to increase revenue and maximize the return on your investment. One of the ways you do that is by partnering with a firm like Adapt Dwellings that has the unique ability to assess, plan, design and build your ADU. What this means for you is that we not only walk you through the process. We are with you every single step of the way.
