Is a garage conversion cheaper than a detached ADU?

Almost always — typically $60,000–$150,000 versus $150,000–$300,000+, because the structure, slab, and often electrical service already exist. The tradeoff is losing the garage and usually ending up with a smaller unit.

Do I need a permit to build an ADU?

Yes, everywhere. Several states — California especially — have streamlined ADU approvals with deadlines cities must meet, but unpermitted units risk fines, insurance denial, and serious resale problems. A builder who hints at skipping permits is disqualifying themselves.

How long does an ADU take to build?

Plan on 9 to 18 months end to end: 2–4 months for design and engineering, 2–6 months for permits depending on your city, and 5–9 months of construction. Builders with local permit experience reliably land on the short end.

Are prefab ADUs cheaper than site-built?

The unit price looks cheaper, but site work, foundation, craning, and utility connections often close most of the gap. Compare total delivered-and-connected cost, not the sticker — sometimes prefab wins, sometimes it doesn't.

How Much Does an ADU Cost to Build in 2026?

An ADU is the largest check most homeowners will ever write to a contractor — bigger than a kitchen, bigger than a roof, sometimes bigger than the car in the driveway several times over. And unlike a kitchen remodel, the pricing is opaque enough that two legitimate builders can bid the same backyard unit $60,000 apart. Here's the real math.

The 2026 ranges

ADU type	Typical all-in cost	Notes
Detached new-build ADU	$150,000 – $300,000+	The backyard home; most expensive, most value added
Garage conversion	$60,000 – $150,000	Structure and slab exist; utilities and insulation drive cost
Attached ADU / addition	$100,000 – $250,000	Shares a wall and often utilities with the main house
Basement or interior conversion	$80,000 – $180,000	Egress, ceiling height, and moisture work set the price

Per square foot, expect roughly $250–$500 all-in in high-demand states — design, permits, site work, construction, and utility connections included. Rural markets and permissive states run lower.

Where the money actually goes

The construction itself is only part of the number. The line items that surprise homeowners:

Site work and utilities — trenching water, sewer, and electrical to a backyard unit can run $10,000–$40,000 alone, and it's the most common source of bid divergence.
Design and permits — plans, structural engineering, and city fees typically total $10,000–$30,000. Some cities now offer pre-approved plans that cut this meaningfully.
The panel problem — many older homes need a main electrical panel upgrade before an ADU can connect. That's $1,300–$4,000 you want in the bid, not discovered after demolition.
Finishes — the spread between builder-grade and custom finishes on a 600 sq ft unit is $20,000+ by itself.

Why bids for the same ADU spread 20–30%

When three licensed builders bid the same plans, a five-figure spread is normal — and informative. The usual causes: different assumptions about site work (did they actually walk the utility path?), different allowances for finishes (a $5,000 flooring allowance vs $15,000 is a hidden $10,000 gap), and different overhead models. A bid that's dramatically lower than the others usually has thin allowances that come back as change orders — on a six-figure project, comparing bids line by line isn't optional. It's five figures of your money.

Does the investment pencil out?

Two ways an ADU pays: rent and value. Long-term rents for a well-built one-bedroom ADU in high-demand metros commonly run $1,500–$2,500+ per month, and appraisals increasingly credit permitted ADUs meaningfully at resale. The math is strongest where rents are high and lots are large — run your own numbers with real local rents before committing, and get real bids before running the numbers. Estimating with internet averages on a project this size is how budgets break.

How to choose the builder

On an ADU, generic contractor vetting isn't enough. You want: ADU-specific experience (ask how many they've completed in your city — permitting fluency is worth months), a permit track record they'll show you, license and insurance verified with your state board, and references from ADU clients you actually call. Then get at least three bids on the same plans. On this project, the comparison isn't about saving a few hundred dollars — it's routinely the difference of $30,000 or more for identical work.