Are you looking to increase the value of your property or find a way to make some extra income? Do you need somewhere for your aging parents to live? Are you interested in creating an affordable housing option for individuals in your community? If yes, you should consider building an ADU.

ADUs are expensive and can be a headache to build for beginners. However, with the right guidance, you can build an income-generating ADU all by yourself with a lot less stress involved. Read on for a step-by-step guide on the development process and various aspects associated with constructing an additional dwelling unit on your own.

Table of Contents


1. Know the Different Types of ADU’s

Before you start building or even planning, it is imperative that you know about the different types of ADU’s to determine which one will work best for you. The six main types of ADU’s include:

  • Detached ADUs that are stand-alone dwellings
  • Attached ADUs that attach to the primary dwelling
  • Garage conversion ADUs that are garages made into an ADU
  • ADUs above a garage or workshop
  • Basement conversion ADUs
  • Internal ADUs that are a part of the interior of the primary home

There are also Junior ADUs (JADUS) that are a max of 500 sqft. In California, you can have a JADU and an ADU on the same lot. For more information about this exciting new rule and the different types of ADUs, you can check out our free ADU guidebook.


2. Set Your Budget Early On

One of the biggest ADU mistakes people make is not setting a budget early on. Your budget is going to help you ensure that you have enough money to finish the construction of your ADU. Without it, you could severely underestimate your costs and end up with a half-finished project.

Determining Your ADU Costs

ADU development costs can vary drastically between projects based on the size and form of your ADU. Hence why you can’t predict the cost of your ADU based on your friend’s costs.

We highly recommend breaking your budget up into two main sections to help ensure you cover all your costs.

  1. Design and Planning
  2. Construction

Under the design and planning section, you will want to make sure you include all drawings, engineer calculations, and energy calculations. Depending on your location, you may also have to include things like land surveys and stormwater drainage. Our very helpful eCourse has an excellent stormwater plan sample to help with the drainage costs estimates.

For the construction phase, you are going to want to make sure you include labor, rough materials, and appliances. A lot of people often forget to plan for what is going to have to go inside of the ADU once it is built.

Don’t Forget Extra Fees

It is crucial that you remember that you will have to pay city fees for:

  • Clearances with utility companies
  • Construction permit fee
  • Impact development for some sizes
  • Plan check

Be sure to include these fees within your budget. It is also good to always plan for unexpected costs as well so that you are not blindsided if something goes wrong during the build.


3. Know How You Will Finance Your ADU

After you determine your budget, general timeframe, and have an idea of who you plan on working with, it is time to figure out how you are going to pay for it all. Even though at this time there are no loan products tailored to ADUs specifically, there are still a number of finance options available to you.

A few to consider are:

  • Home equity loans & HELOCs
  • Cash-out refinancing
  • Peer to peer lending
  • Renovation loan
  • Savings Account

Be sure to be completely upfront with your lender to make the process of securing financing as easy as possible.

For a more in-depth analysis of each financing option, check out our free ADU guidebook to help you determine which option will work best for you.


4. Conduct A Feasibility Study

An ADU feasibility study will help you determine how big of an ADU you can build on your property, as well as the guideline associated with doing so. It can also help you figure out what kind of challenges you may face in the future once you start planning and building your unit.

You should begin your study by creating a sitemap of your property with all your structures marked. From there, you should meet with your local planning department to figure out things such as height limitations and setback requirements.

You can download our ADU eCourse for a hands-on video course that contains details on how to conduct a feasibility study and create a site map.


5. Design Your ADU

Once you know where your ADU will be going on your property and that it is feasible to build, you can start designing how you want it to look. We highly recommend designing an ADU floor plan and having a 3D rendering done. By doing so, you will be able to see how your design will look in real life to avoid having it built and then deciding to make costly changes later on if you realize you do not like it.

ADU Design Tips

When designing your ADU, there are quite a few tips and tricks you should be aware of including:

  • Always design from the outside in to ensure you do not go over your size restrictions
  • Use storage wisely
  • Make use of space with wall and ceiling mounted lighting
  • Do not skimp on laundry units
  • Take advantage of natural lighting

For more tips and tricks, you can download our free ADU guidebook today!


6. Plan Your ADU

This step of the process is filled with a plethora of surveys and necessary submissions to places like the planning department, building, and safety department, and various utility service departments. You need to ensure you submit plans for approval to all necessary departments to ensure everything is done legally.

The different plans, surveys, and calculations you will need for this step may include all or part of the following:

  • Architectural drawing
  • Structural drawing
  • General notes and details associated with drawings
  • Electrical drawing
  • Plumbing drawing
  • Energy calculations
  • Stormwater management
  • Mechanical, electrical, and plumbing engineering
  • Land survey
  • Soil engineering

As you can see, there is a lot that goes into this step, and each aspect is important to the success of your build. That is why we have put together several immensely helpful training videos and sample plans in our eCourse. We take all the wonder out of architectural and structural plans to make the process as easy as possible for you.


7. Obtain Your ADU Permits

Future you will be facing a slew of legal predicaments if you don’t acquire the correct permits for your ADU. To prepare you for this process, we have laid out the four general steps to obtaining a permit below.

  1. Submit drawings, calculations, and required documents
  2. Plans are reviewed and sent back with instructions on how to gain compliance with codes and regulations
  3. You will need to obtain clearance from city departments (i.e. water, power, etc.)
  4. Plans will go through final review and permits will be issued

Once you have the necessary permits, you will be able to begin constructing your ADU legally and without worry.


8. Find Your Contractor

Now that it is time to start building, you are going to need someone to do it. You can do it yourself if you have the correct knowledge and experience to do so. However, since ADU’s are essentially tiny homes, we highly suggest finding a qualified contractor that specializes in ADUs to build it for you.

Finding a contractor is not always as easy as it seems. That is why we have detailed out a step-by-step list to help make the process easier for you.

Have A Detailed Plan

Remember step 5 where you created a detailed plan for your ADU? Well, this is why you did so. By having a detailed plan, your contractor can not change prices on you in the future by claiming that they were not aware of what the whole pan entailed.

The more you have planned out, the better the contractor can accurately estimate the final costs of your project. So, to save yourself money, make sure you do step 5 as thoroughly as possible.

Make A Detailed Scope of Work

Describing the work to be performed is extremely important to ensure everyone is on the same page. In your scope of work, you will need to include:

  • Project overview
  • Project deliverables
  • Project scope
  • Schedule summary
  • Project management

If you need assistance with this step, our eCourse has a very helpful construction scope of work sample for you to use!

Conduct Your Contractor Search

Take advantage of word-of-mouth referrals. Who do your family and friends recommend? Do your designers have someone they commonly work with?

You should also look at professional organization directories. As well as references and reviews from past clients whenever you do come across a contractor you are considering working with.

Narrow Down to 3-4 Contractors

Once you have looked at a few different contractors, it is time to narrow down your choices to about three or four that you feel are qualified for your job. Meet these contractors in person and have a few questions ready to ask them such as:

  • Have you completed ADU projects before?
  • How long has your company been in business?
  • Do you have insurance? If so, what kind of coverage do you have?

You want to work with fully insured ADU professionals that have the necessary experience to complete your job correctly.

Compare Contractor Estimates

Have the three contractors you narrowed down give you estimates based on your detailed scope of work. They should break down the costs based on various trades and give you an idea of the project payment schedule.

As a tip of advice, don’t go for the lowball bid. That contractor may be desperate for work and is probably not the best person for the job. Price is a factor, but so is how well the two of you can communicate and how good of a job they are capable of doing.

Draw A Contract

Your contract is your safety net for if things go wrong. Therefore, you must create a contract that details every step of the process to ensure you are completely covered in case you need to seek legal action.

In your contract, you should include:

  • Schedule of the stages of the project
  • Information about warranties
  • A termination clause
  • A requirement that the contractor will obtain a lien release

These are just some of the very important aspects of a contract. You can reference our “Construction Contract” video in our ADU eCourse for further reference on how to draw up a sound contract.


9. Acquire Your Materials

You should have created a budget for your finished materials back in step 2. This budget may need updating after you have designed and planned your ADU but should still be close to what you originally budgeted.

Your contractor should be able to help you determine which materials you need and where to get them for the best price since they build ADU’s often. If they are unable to help you, you can reference video 11 in our ADU development eCourse for tips on how to purchase your finishing materials.


10. Construct Your ADU

Now you can finally start to construct your ADU! You can monitor the construction of your ADU by checking in during the different phases you and the contractor have laid out. It is always good to consistently communicate with the contractor to ensure everything is going smoothly.

If you have questions or design plan changes, always ask the contractor you hired, not anyone else. His crew is probably not as qualified as him to make decisions, so to avoid any miscommunication, be sure to always talk to the contractor about project progress and updates.


11. Add ADU Appliances and Furniture

Once your ADU is built, you will still need to add in the finishing touches to make it a livable space. Luckily, there are several ADU appliances and furniture options for you to consider.

It is important to remember that space is extremely limited. Therefore, you should go for the appliances that save the most space and have a variety of purposes. For example, a two-in-one washer and dryer unit is a great space saver that does your laundry without you needing to switch from the washer to the dryer!


12. Enjoy Your ADU!

Once your ADU is built and fully furnished, it is time to step back and enjoy what you have accomplished! Now you have successfully increased the value of your home and have an extra income opportunity right in front of you.

We hope this guide has helped you gain a better understanding of how to build an ADU yourself. For more assistance, you can reach out to us for your design, planning, and construction needs because here at Levi Design Build, we are always eager to provide our customers with the best customer experience, design, and craftsmanship. You can also check out our free ADU guidebook and amazing eCourse for tons of training and resources to ensure your ADU development goes as smoothly as possible.