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:
You can also send a message to request a free ADU Feasibility Assessment (sample). You’ll get an overview of your site footprint as well as an assessment of access, terrain, trees, utilities and other considerations for building an ADU in Bend, Redmond, or Sisters.
All about ADUs in Central Oregon
What is an ADU?
Accessory Dwelling Units (ADUs) are a new phenomenon brought about by the interest in cities to better use the limited land available and provide for more affordable housing.
Technically they’re second “living units” on properties previously limited by zoning to single family residences,
Where applicable, the new rules allow for smaller, full living units in three forms: within existing structures, attached to existing structures or fully detached buildings.
A “living unit” is defined as a space with a full bath and kitchen facilities.
Why should I build an ADU?
Your property is an underutilized asset. Building an ADU can create a passive income stream and/or self-contained living space for yourself, family or friends. Additional benefits include:
Long-term rental income
Short-term rental income
Increased living space
Space flexibility
Asset appreciation
Increased property value
Aging parents
Downsizing for your own use
Often there will be some combination of these reasons. GreenSavers can help you develop a design and build strategy specific to your needs.
How do I get started?
We organize the process from idea to completion into three phases: (1) Feasibility (2) Design and (3) Construction.
FEASIBILITY
In the FEASIBILITY stage we want to be able to give you a good idea of if, how and where your vision of an ADU on your property can be realized. Through the process we work to identify any major issues that might come up during the course of design, permitting and construction so that you can have confidence to proceed.
We are happy to provide information on rough feasibility at no charge and without obligation. Deeper investigation, when necessary, is provided on an hourly basis.
DESIGN (+/- 3 months)
In the DESIGN phase, we take what we learned during feasibility and document all aspects of the existing property. We work to gather all your ideas and preferences for the project. From there our designer will provide a first draft in terms of floor plans and elevations. With your feedback the design will evolve to your final approval. The outcome of the DESIGN phase is a complete set of plans ready for bids, permitting and construction.
Our design package is provided on a fixed fee basis. Additional costs may include engineering, survey, or other professional services to qualify the site.
CONSTRUCTION (+/-9 months)
The CONSTRUCTION phase starts with permitting and estimating. We will gather bids on major elements to develop a more precise estimate of the total project cost. At this stage you are able to make decisions on details affecting the budget. At the same time we prepare and submit the permit application. Once the estimate is approved and permit is issued we can begin construction.
Construction projects are performed on a cost-plus basis. All costs are billed as incurred with no mark up. A small deposit is requested to start the permitting and estimating process. Once the permit is ready to issue a payment of 50% of the project estimate is required. Additional progress payments are made during the course of the project.
Can I build an ADU on my property?
This question is best answered through a consultation. Not all properties are candidates for cost effective construction.
The first hurdle is local rules. The primary municipalities in Central Oregon allow ADUs within city limits, but rules differ by town and zone. ADUs are not currently allowed in the counties, outside of city limits, but rulemaking is progressing and some allowance is expected soon.
Other issues include:
Space: Adequate space is needed for the building footprint, within required property line setbacks. Space is also a consideration for 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.
HOAs: Not all Homeowner’s Associations allow ADUs.
Septic: In most cases you must be connected to sewer to permit an ADU.
Bend development code has recently changed to allow more opportunities for subdivision as well as duplex and triplex construction on single family residential lots.
GreenSavers offers a free phone or on-site consultation to determine development opportunities and challenges.
Can I finance the project?
New ADU financing options are emerging.
Since an ADU is not a stand-alone piece of “real property” it cannot be financed independently 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
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.
How long does it take?
Consider 12-months as a rough guide from start to finish. Of course this can vary by project but can be considered in three phases:
Pre-permit: Includes contracting and design and can take from 4-8 weeks.
Permitting: Varies by jurisdiction. 6-8 weeks.
Construction: Varies by complexity, market activity and weather. 4-6 months.
Due to demand there can be a project backlog in design or scheduling conflicts for major trades that can affect this schedule.
How much does it cost?
Construction costs have been escalating in the past few years, but so have home and rental values. Although ADUs benefit from lower permitting costs, regardless of size, they must carry much the same infrastructure burden as a typical new house.
In the end, costs are a function of design + features + size and are specific to site conditions. Our experience is that our energy smart ADU projects run from $125,000 (a simple garage conversion) to $350,000 (a well-appointed 800 square foot ADU over a large garage).
Will adding an ADU affect my taxes?
Adding an ADU to your property will increase your living space and will affect the tax assessment.
Will an ADU increase my home value?
Yes. As a fairly new real estate feature, the data is anecdotal.
One study in Portland indicated a positive impact on values from 25% to 34%. The same study found that adding an ADU to a single-unit property “could reasonably add 51% to longer-term measures of value or return.”. It is clear from the real estate industry that new and existing homes with ADUs are in demand.
How large of an ADU can I build?
The factors that influence the size decision for an ADU include:
Based on the actual attributes of your property there may be a limited feasible footprint on your property for the development of an ADU.
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. Generally ADUs are limited to 800 or 900 square feet.
You can usually build a two level ADU with some limitations on setbacks of decks and roof heights.
Garages, or exterior accessed storage spaces do not count in the square footage limitation.
Generally ADUs below 400 square feet are designed as studios, 400-600 square feet are studios or one bedroom and 800 square feet can support two bedrooms. ADUs can have more than bathroom, but this may have impact on the water supply requirements.
Can I cover my costs by renting the ADU?
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.
When considering your investment, remember that you will benefit by cash flow, tax deduction, appreciation and improving equity.
Is an ADU the same thing as a “small house”?
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 smaller traditional home.
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.
Are there standard or pre-made designs available?
Standard ADU designs and design packages are available and we are happy to work with them. Our practical experience is that the site constraints, owner preferences and requirements of local building codes, result in quite a bit of additional work required to finalize and permit the project. While these plans or ideas can offer a good starting point for the project, they do not seem to offer an important time or cost advantage in the project overall.
How do I choose an ADU builder?
Developing your property to add an Accessory Dwelling Unit will be a major financial decision. When choosing a designer and builder for the job there are several important factors to consider:
Experience and Reputation: Look for a builder with a proven track record of building ADUs.
Budget and Finances: Make sure the builder is transparent about their pricing and that they have experience managing projects within your budget. Ask about any additional costs that may arise and how they plan to handle them.
Design and Style: Choose a builder who has experience with the unique issues encountered with ADUs and is willing to work with you to customize your home to your specific needs.
Communication and Customer Service: Good communication is key in any building project. Make sure the builder is easy to communicate with and responsive to your needs and questions.
Project Management: A good builder should have a clear and organized process for managing the construction of your project. Ask about their project management process and how they plan to keep you informed and involved throughout the project.
Warranty and Service: Make sure the builder offers a warranty on their work and that they are available for ongoing maintenance and support.
Licensing and Insurance: Check that the builder is licensed and insured in Oregon and that they have the necessary certifications to legally build homes in your area.
We think GreenSavers’ performance across these attributes is excellent and you can read more about our qualifications here.