These units go by many names depending on the region: accessory apartment, in-law suite or in-law apartment, granny flat, second unit or secondary suite, and are also referred to as ohana units in Hawaii and casitas in the Southwest. Collectively, they’re commonly known as accessory dwelling units (ADUs), a popular option for adding flexible living space or rental income to a property.

Regardless of what they’re called, an accessory dwelling unit (ADU) is an additional, self-contained living space on a single-family lot that is separate from the primary home, according to the U.S. Department of Housing and Urban Development. These independent units come equipped with their own kitchen and bathroom facilities and can be either attached or detached from the main residence.

ADUs have steadily grown in popularity because of their flexibility and practicality. While they were originally designed to provide private and convenient housing for aging family members, today they serve a variety of purposes. Many homeowners use them to house young adults as they save for their own place, while others rent them out to generate passive rental income and increase their property’s overall value.

Keep reading to learn more about accessory dwelling units, explore their versatile uses, and discover key factors to consider if you’re thinking about adding an ADU to your property.

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The classic ADU or in-law suite is a self-contained living space that provides both convenience and privacy for residents. At a minimum, these units typically include:

• A separate entrance for independent access

• A bedroom or sleeping area

• A full bathroom

Some accessory dwelling units may also feature a kitchenette or full kitchen, as well as a living room, making them fully functional homes for family members or tenants.

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• Attached ADU – An attached ADU is connected to the main house or part of the primary residence but is designed to function as an independent living space. These units usually feature a separate entrance on the side or back of the home. Attached ADUs generally require less space than freestanding units and are typically more cost-effective to build.

  Detached ADU – A detached in-law suite is a standalone structure built on the same property as the main house. It provides greater privacy than an attached unit, making it ideal for renting out or housing family members who want independence.

  Interior ADU / Converted Space – This type of ADU is located within the main house and can be an existing area converted into a self-contained living unit, such as a basement, attic, or garage. Many interior ADUs still include a separate entrance, allowing privacy while maximizing the use of existing space.

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An ADU is an incredibly versatile feature that can serve a variety of purposes. Here are some potential uses to consider:

Home office – An ADU can be the perfect spot for working from home or running a small business, providing a dedicated space free from household distractions.

Guest quarters – ADUs make excellent accommodations for visiting family or out-of-town guests. This allows both you and your guests to maintain privacy while staying on the same property.

Residence for adult children or aging parents – Multigenerational living is becoming increasingly popular due to rising homeownership costs. An ADU allows families to live together while maintaining independence. Adult children can use it as a starter home while saving for their future, and aging parents can enjoy a safe, private space close to family support.

Rental unit for additional income – Many ADUs function as fully equipped apartments, making them ideal for rental opportunities. Renting out an ADU long-term or short-term via platforms like Airbnb or VRBO can help offset construction costs and potentially contribute to your mortgage payments.

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1. Local building codes and zoning laws

Before planning an ADU or in-law suite, it’s crucial to research local zoning laws and building codes. Every city or county has specific rules regarding lot size, accessory dwelling units, parking requirements, and setbacks. Check with your local zoning office using your lot and block number to determine if adding an ADU on your property is allowed. Homeowners’ associations may also have additional restrictions or guidelines regarding in-law suites and their permitted uses.

If you plan to rent out your ADU for income, be aware that additional permits or inspections may be required for rental compliance. Understanding these requirements before starting construction can help you avoid costly delays or violations.

2. Purpose of the ADU

Identify who will be using the ADU and its intended purpose. This will help you determine the features and layout that matter most. For aging parents or relatives, consider accessibility upgrades such as ramps, wider doorways, or grab bars. If the ADU will function as a home office, studio, or small business space, plan a layout that maximizes productivity and comfort while keeping the space functional.

3. Utilities and infrastructure

ADUs typically share utility connections with the main house. Before construction, ensure that your current water, gas, and electrical systems can support the additional living space. This may require upgrades to your infrastructure or separate metering, depending on your plans and local regulations.

4. Budget and financing

Even though ADUs are generally smaller than traditional home additions, they can still be a significant investment. Consider your budget carefully and explore financing options such as home equity loans, construction loans, or cash-out refinancing. Proper planning and understanding the financial commitment will help you complete your ADU project successfully and maximize its long-term value.

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The Bottom Line

With their versatility and numerous advantages, in-law suites or ADUs provide extra living space that can meet the needs of family members, guests, or even serve as a rental unit