Accessory Dwelling Unit (ADU)

Definition

An Accessory Dwelling Unit (ADU) is a permitted secondary residence on a single-family lot — detached, attached, or interior conversion (e.g., garage or basement). ADUs add a separately-rentable unit without subdividing the lot, and many US jurisdictions (notably California under SB 9 / AB 68 / AB 2221) have streamlined ADU approval to encourage housing supply.

Worked example

A 1,200 sqft SFR on a 6,000 sqft lot in a permissive jurisdiction may support a 1,000 sqft detached ADU at roughly $250–$400 per sqft of construction, with the ADU rentable separately for $2,500–$4,000/month depending on market.

How DealIntel uses it

DealIntel runs ADU as a first-class strategy with its own zoning, setback, FAR (floor-area ratio), and parking checks. Where an ADU is feasible, the platform compares the ADU strategy ROI side-by-side with Fix & Flip and BRRRR on the same property.

Related terms

• Buy, Rehab, Rent, Refinance, Repeat · BRRRRA long-hold real estate strategy that recycles capital through a cash-out refinance after stabilization.
• Capitalization Rate · Cap RateThe annual unlevered return of an income property, expressed as a percentage of its value.
• Comparable Sales · CompsRecent sales of similar properties used to estimate the market value of a subject property.