Breaking Down ADU Costs: What You Need to Know Before You Build

Introduction

Building an Accessory Dwelling Unit (ADU) in San Diego is a smart investment, whether you’re looking to generate rental income, create extra living space for family, or boost your property’s value. However, one of the biggest questions homeowners ask is: How much does it cost to build an ADU?

The answer isn’t one-size-fits-all. The total cost depends on various factors, including size, design, materials, labor, and local regulations. In this guide, we’ll break down the key cost components of an ADU, so you know exactly what to expect before you start your project.

The Average Cost of Building an ADU in San Diego

The cost to build an ADU in San Diego typically ranges from $150,000 to $300,000+, depending on several factors. A smaller, garage conversion ADU might cost on the lower end, while a larger, high-end detached single-unit ADU with premium finishes could easily exceed $300,000.

To better understand where your money goes, let’s break it down:

1. Pre-Construction Costs

Before construction even begins, there are several upfront expenses you need to consider:

A. Feasibility Study & Site Prep ($3,000 – $10,000+)

• A feasibility study determines if your property can support an ADU and identifies any potential obstacles.

• Site preparation may involve tree removal, soil grading, or utility upgrades, all of which can add to your costs.

B. Design & Architectural Plans ($6,000 – $15,000+)

• Professional architectural plans ensure your ADU is functional, aesthetically pleasing, and compliant with local zoning laws.

• The complexity of your design affects the cost—custom designs are more expensive than pre-approved plans.

C. Permits & City Fees ($8,000 – $20,000+)

• San Diego has streamlined the ADU permitting process, but fees still apply.

• Costs include plan check fees, impact fees (which may be waived for smaller ADUs), and utility connection fees.

2. Construction Costs

This is where the bulk of your budget will go. Here’s a breakdown of the major cost components:

A. Foundation & Site Work ($10,000 – $40,000+)

• Detached ADUs require a new foundation, while attached or garage conversion ADUs may need structural reinforcements.

• If your lot has challenging terrain, expect additional costs for excavation and leveling.

B. Framing & Structural Elements ($40,000 – $80,000+)

• Lumber, steel, and other structural materials account for a major portion of construction costs.

• Framing complexity, such as vaulted ceilings or multi-story structures, will drive costs higher.

C. Plumbing, Electrical & HVAC ($20,000 – $50,000+)

• Utility connections for water, sewer, and gas can be costly, especially if they need to be extended from the main house.

• Energy-efficient HVAC systems (mini-split systems, radiant heating) are popular but may add to your budget.

D. Interior Finishes ($30,000 – $80,000+)

• Flooring, cabinetry, countertops, appliances, and lighting fixtures can vary significantly in price.

• Opting for high-end materials like quartz countertops and custom cabinetry will increase costs.

3. Additional Costs to Consider

Beyond construction, there are extra expenses that homeowners often overlook:

A. Landscaping & Hardscaping ($5,000 – $20,000+)

• Adding walkways, patios, and privacy fencing can enhance your ADU’s appeal and functionality.

• Xeriscaping and drought-resistant plants are excellent choices for low-maintenance landscaping.

B. Furnishings & Appliances ($5,000 – $15,000+)

• If you’re renting out your ADU, you may need to furnish it with essentials like a refrigerator, stove, washer/dryer, and furniture.

C. Utility Connection Fees ($2,000 – $10,000+)

• If your ADU requires new utility meters, the city may charge connection fees for water, sewer, and electricity.

How to Save Money When Building an ADU

If you’re looking for ways to keep costs down without sacrificing quality, consider these strategies:

1. Use Pre-Approved ADU Plans

The City of San Diego offers pre-approved ADU designs, which can save thousands on architectural fees and reduce permitting time.

2. Choose a Simpler Design

Opt for a rectangular floor plan with minimal exterior modifications to reduce framing and material costs. Avoid unnecessary design features like complex rooflines and excessive windows.

3. Work With an ADU Specialist

An experienced ADU builder can help you find cost-effective solutions, avoid costly mistakes, and streamline the permitting process.

4. Explore Financing Options

Consider HELOCs (Home Equity Line of Credit), ADU construction loans, or cash-out refinancing to finance your project efficiently.

Is Building an ADU Worth the Investment?

Absolutely! Here’s why:

Rental Income Potential – A well-built ADU can generate $2,000 – $3,500 per month or more in rental income in San Diego.

Increased Property Value – ADUs typically increase property value by 20-30%, making them a solid long-term investment.

Multi-Generational Living – Many homeowners build ADUs to accommodate aging parents, adult children, or live-in caregivers.

Conclusion: Plan Your ADU with Confidence

Building an ADU in San Diego is an exciting opportunity, but understanding the costs upfront is essential to staying on budget and avoiding surprises. By carefully planning your project, working with knowledgeable professionals, and exploring cost-saving options, you can maximize the value of your investment.