In today’s competitive real estate market, maximizing buying power is crucial. One increasingly popular strategy is purchasing a home with an accessory dwelling unit.

In operating a brokerage with divisions in residential real estate and development, we understand the nuances of such investments and their potential benefits.

An accessory dwelling unit (ADU) is a secondary housing unit on a single-family residential lot. These units can be detached, attached to the primary residence or converted from such existing structures as garages or basements. ADUs offer a unique blend of flexibility and functionality, providing everything from additional housing for extended family members to rental income.

One of the most compelling advantages of purchasing a home with an ADU is the potential for rental income. By renting the ADU, homeowners can offset their mortgage payments. This additional income can make homeownership more affordable and enhance buying power by allowing you to qualify for a larger loan or afford a more expensive property.

Homes with ADUs often see an increase in property value. As demand for flexible living arrangements grows, properties with ADUs become more attractive to potential buyers. This increased demand can lead to higher resale values, making an ADU a smart, long-term investment.

The City of Grand Junction encourages the development of ADUs as part of city housing strategies.The city recognizes ADUs expand housing inventory as well as give homeowners the opportunity to generate income from their properties.

In 2023, the city established an ADU production program to support and incentivize the construction of ADUs. The program is open to all ADU developers. Any city impact fees are paid by the city. Those who receive incentives through the program commit to keeping their ADUs as long-term rentals for a certain period of years.

ADUs provide a solution for multi-generational families. They offer private, independent living space for elderly parents, adult children or other family members. This setup allows families to stay close while maintaining individual privacy and autonomy. In addition, ADUs offer unmatched flexibility, adapting to changing needs over time.

Whether you need a home office, guest house or studio space, an ADU can serve multiple purposes throughout your homeownership journey.

ADUs promote sustainable living by making efficient use of existing land and infrastructure. They contribute to the density of urban areas without the need for extensive new developments, aligning with environmentally conscious housing trends.

Before purchasing a home with an ADU, it’s essential to understand local zoning laws and regulations. Ensure the ADU complies with all legal requirements and you’re aware of any restrictions that could affect its use.

While traditional mortgages can finance homes with ADUs, exploring specific loan programs designed for such properties can be beneficial. Some lenders offer products that consider the rental income potential of an ADU, which can increase your borrowing capacity.

Owning a home with an ADU entails additional responsibilities, including maintenance and tenant management if you choose to rent it out. Consider these factors and decide whether you’re prepared to handle the extra duties or if hiring a property management service is necessary.

Purchasing a home with an ADU is a strategic move to enhance your buying power and maximize your investment. With the potential for additional income, increased property value and numerous lifestyle benefits, an ADU offers a versatile solution for modern homeowners.

Investing in a home with an ADU is not just about buying property. It’s about creating opportunities. Whether you’re looking to generate extra income, accommodate family members or simply increase your home’s value, an ADU can be a valuable addition to your real estate strategy.