An Accessory Dwelling Unit is a secondary, self-contained residential unit located on the same lot as a primary single-family home. It typically includes its own kitchen, bathroom and sleeping area and may be attached to the main residence, detached as a standalone structure or created by converting existing space such as a basement or garage.
In real estate transactions and appraisals, ADUs are evaluated for their impact on property utility, rental potential and overall market value. Their presence can influence comparable sales analysis, particularly in markets where ADUs are common and legally permitted. Appraisers also consider whether the unit is permitted, as unpermitted ADUs may not be fully recognized in valuation or financing decisions.
ADUs matter because they can increase income potential for homeowners, expand housing flexibility and affect affordability calculations used by lenders. They are often reviewed alongside zoning regulations and local housing ordinances to determine long-term usability and compliance.