Cozy accommodations for long-term or short-term guests
ADUs are livable and intended for long-term residences like rental properties.
Guest houses cost between $45,000 and $65,000 to build.
Building an ADU costs more—from $60,000 to $225,000.
ADUs and guest houses both improve a home's market value.
Expanding your home's property with space for guests or renters can add convenience to your life and value to your home. Two popular options for creating this extra space are an accessory dwelling unit (ADU) or a guest house. These two types of home additions have several similarities, but there are some differences you should explore before deciding which is right for you.
ADUs and guest houses both provide additional living space on a property but differ in their use and amenities. ADUs are self-contained units designed for long-term independent living. Guest houses are intended for short-term stays and suitable for occasional visitors rather than permanent residents.
| ADU | Guest House |
|---|---|
| Long-term living | Short-term stay |
| Full kitchen and bath | No or fewer amenities |
| Permanent residence | Temporary stay |
| Local zoning | Simpler permits |
| Attached or detached | Separate structure |
ADUs are designed for long-term independent living, such as rental properties or in-law suites. These self-contained units are equipped with a full kitchen, bathroom, and living space, making them suitable for permanent residence. Their self-sufficiency and regulatory compliance make them versatile for a variety of long-term housing needs.
Guest houses are intended for short-term accommodation of visitors, such as friends and family. They may not have full kitchen facilities and sometimes lack a bathroom. Visitors rely on the primary residence for these amenities. Guest houses are used for occasional stays rather than permanent residences, making them a convenient option for providing comfortable and separate lodging for visitors.
ADU layouts resemble small apartments, with a complete kitchen, bathroom, bedroom, and living area. ADUs can be attached to the main house, such as a basement or garage conversion, or detached as a separate structure on the same property. Whether attached or detached, they always maintain a clear separation from the primary residence.
Guest houses are small, separate structures on the property with simpler layouts. They include a bedroom and a small living area, but they lack a full kitchen and bathroom. While sometimes these spaces can have a kitchenette or half-bath, it's customary to share these amenities in the main house. The design prioritizes comfort for short visits, providing a private space for guests without the need for extensive amenities.
As long-term stay options, ADUs are subject to stringent local zoning and building codes. Regulations often require ADUs to have a minimum and maximum size, setback requirements, parking provisions, and occupancy limits, but the rules vary by location. They also need separate utility connections and adequate fire safety measures. A local home addition contractor will be well-versed in what your regulations require for a new ADU.
Guest houses, on the other hand, face fewer regulations and less stringent regulations since they’re not meant for permanent occupancy. The permitting process for guest houses focuses on structure safety. Guest house regulations may also address size and distance from the main dwelling.
Building an ADU costs between $60,000 and $225,000, on average. Like in-law suites, ADUs are more expensive than guest houses since they’re built for long-term living. The higher price includes a complete kitchen, bathroom, and living space, as well as meeting all the necessary building codes and safety regulations.
The cost to build a guest house ranges between $45,000 and $65,000. Guest houses have simpler designs and fewer amenities than ADUs, which translates to lower construction costs and fewer regulatory hurdles. Maintenance costs are also lower since guest houses are used less frequently and don't require the same level of utilities and upkeep as a full-time residence.
Both ADUs and guest houses increase home value, but ADUs have the upper hand since they offer potential rental income and accommodate long-term residency. This aspect is attractive to investors and buyers looking for supplementary revenue streams or flexible living arrangements for extended family members.
However, adding a guest house will still boost your home’s value, since many buyers find the extra space and privacy they offer appealing. Plus, guest houses can be ideal for homeowners who are looking for a home office space or a private area for older children. This sort of flex space is attractive in any market.
"There is some demand in the market for ADU's, specifically in-law suites. Most of this is driven by new homebuyers looking for ways to help pay their mortgage by renting space without having to qualify for an additional loan to purchase a separate investment property. This has increased as mortgage rates have continued to increase and homebuyers look for ways to save."
— Maureen McDermut, Realtor at Sotheby's International-Montecito
Casitas, common in the Southwestern U.S., are similar to guest houses as they are small, detached structures. However, casitas may offer more features than guest houses. While they can be used for short-term stays and guest accommodations, they're frequently used for home offices or studios and include basic amenities like a bathroom, or kitchenette.
The biggest drawback of an ADU is the potential complexity and cost associated with regulatory compliance and construction. ADUs often require navigating local zoning laws, building codes, and permit processes, which can vary significantly by location. Meeting these requirements can be time-consuming and may involve additional expenses. Depending on the property layout and existing buildings, integrating an ADU might require substantial renovations or adjustments, further adding to the overall investment and logistical challenges.
On average, guest houses are 600 to 1,500 square feet. However, the size of a guest house can vary widely based on its intended use, local regulations, and the available space on the property. Guest houses range from a compact studio layout of around 300 to 600 square feet to larger structures with multiple rooms and up to 1,000 square feet or more. Those larger guest houses often include amenities such as a kitchenette and full bathroom.
