Is Building an Accessory Dwelling Unit (ADU) a Good Investment?

Question

The rental market in my area is hot. I want to take advantage of it somehow. Constructing an accessory dwelling unit (“ADU”) is one option I have considered. Doing so seems more affordable buying a separate rental property right now. Is an ADU a good investment?

Answer

Even with ADUs gaining popularity, the value an ADU adds to a given piece of property is hard to calculate. This can make determining whether an ADU is a “good investment” difficult . . .

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