Questions about Accessory Dwelling Units
Learn more about an ADU for your home
Feel free to give us a call if you have other questions about ADUs:
All about ADUs in Central Oregon
ADU development is a fairly new and rapidly growing phenomenon. Relaxed city regulations are making this home improvement much more accessible. The reasons to take action to develop an ADU on your property are many:
Long term rental income
Short term rental income
Increased living space
Increased property value
Often there will be some combination of these reasons. GreenSavers can help you develop a design and build strategy specific to your needs. Return to top.
This question is best answered through an on-site consultation. Not all properties are great candidates for cost effective construction. The main considerations are:
Regulation: Cities, communities and neighborhoods may have rules that limit ADU development.
Space: Adequate space is needed for the building footprint, but also required property line setbacks, access and construction staging.
Utilities: Utility capacity and location can greatly impact development costs.
Construction Obstacles: Large trees, rock, underground barriers may limit construction or increase costs.
GreenSavers offers a free phone or on-site consultation to determine rough construction viability. Return to top.
As a relatively new phenomenon, new ADU financing options are emerging. Since an ADU is not a stand-alone piece of “real property” it cannot be financed through a mortgage. It is considered part of the existing property so it is financed as an improvement, like a remodel or a swimming pool. Here are some of the common ways to finance an ADU construction:
Cash (of course!)
Second Mortgage: A second mortgage is a separate loan leveraging the equity in the entire property to build the ADU. There are many second mortgage products which make the construction process easy and reduce the cash burden during construction.
Unsecured Loan: This is a straight loan based primarily on your financial standing.
Refinance/Construction: It is possible to refinance your entire property to include the construction of your ADU.
GreenSavers has deep experience facilitating project financing and can introduce you to one of our financing partners who might be best suited to your needs. Return to top.
Building an ADU in Bend or Central Oregon can be considered in three phases:
Pre-permit: Includes contracting and design and can take from 4-8 weeks.
Permitting: Varies by jurisdiction. 4-8 weeks.
Construction: Varies by complexity, market activity and weather. 4-6 months. Return to top.
Since ADUs, regardless of size carry much the same burden of infrastructure as a typical houses, cost per square foot is not a very effective cost measure. The cost to build an 800 square foot ADU is only about 50% more than to build a 400 square foot home. Consider that cost is a function of design+features+size. Anticipate a range of $125,000 to $250,000 to build a GreenSavers Smart ADU. Return to top.
GreenSavers enjoys a long history helping over 1000 homeowner’s improve the comfort, livability and efficiency of their homes. Our approach to small home design and building includes:
Smart Space Design (SSD)
Long Life Materials. Return to top.
Greensavers builds ADUs to Earth Advantage Certification standards. An Earth Advantage-certified house incorporates design elements, systems and materials that create superior indoor air quality, use natural resources responsibly, protect land, and lower water usage.
Building to this standard does add some cost to the project but returns in terms of operating costs, increased comfort, sustainability and longevity. Customers may be eligible for significant rebates from their energy providers.
Adding an ADU to your property will increase your living space and will affect the tax assessment. Return to top.
Since ADU’s are a fairly recent phenomenon, the impact on appraised value is still developing. However a report published in 2012 in The Appraisal Journal, Understanding and Appraising Properties with Accessory Dwelling Units, looked at 14 properties with ADUs in Portland, OR, and found that ADUs contributed, on average, between 25% and 34% of each property’s assessed value. Additionally, the study found that adding an ADU to a single-unit property “could reasonably add 51% to longer-term measures of value or return.” Return to top.
The factors that influence the size decision for an ADU include:
Property Attributes: There will be a limited feasible footprint on your property for the development of an ADU.
Regulations: Community, city, county and state codes, ordinances, and restrictions will influence the size and placement of an ADU on your property. You will need to be aware of set back, height and footprint limitations.
Budget: Square footage adds cost, but cost is not linear to size. While a 600 square foot unit is 150% the size of a 400 square foot unit it might cost just 20-25% more to build. So that additional square footage might be economic. If rental return is an objective it is worthwhile to consider the expected rental rate by size. In general this favors smaller units. Return to top.
Homeowners have different reasons for building ADUs: Increased family living space, rental income, space flexibility, aging parents, investment, etc. Your goals should be considered in your design. For example if your interest includes short term rental, you might want to emphasize finish and features, where a long term rental will have more emphasis on durability and storage, etc. In general, we believe the economics are positive for long term rental when a unit is designed and built accordingly. Some report very positive returns on short term rentals. Do be aware that you may be subject to local regulations when renting an ADU on your property. Return to top.
In that an ADU uses the same materials and construction techniques of a traditional home, the answer is “yes.” But from the standpoint of design and project execution, building an ADU is not the same as building a traditional home, just smaller.
Design: There is no room for space inefficiency in an ADU. Designers need experience to eliminate any wasted space like halls. They need to emphasize multi-use space, built ins and creative storage spaces.
Project Execution: Development on existing property can be tricky. In addition to the many regulations, the limitations of space and impacts on neighboring properties must be considered. Simple things like access and materials storage can have great impact on project feasibility. Return to top.
Developing your property to add an Accessory Dwelling Unit will be a major financial decision. Individuals may prioritize in different ways but we believe the biggest factors in the builder decision include: Security, craftsmanship, design and cost.
Most builders came into the business from carpentry - offering experience with hammers and nails, this can translate into an emphasis on craftsmanship, which we all appreciate. But it does not necessarily translate into expertise in project management. In fact, for an ADU, carpentry represents as little as 10% of the construction cost. That is why Greensavers emphasizes the importance of effective project management over ownership of trades. We have successfully managed large and complex home improvement projects for over 10 years. We have well developed relationships with leading designers and tradespeople to better assure the delivery of your project on time and budget. That is why we can offer such transparency in our approach and powerful guarantee. Return to top.