Why I Love ADUs—and Why You Should Too
I first got excited about Accessory Dwelling Units (ADUs) when I was working with a short-term rental management company in Atlanta. We managed around 10 ADUs, and what struck me immediately was how powerful they were for homeowners. In many cases, the rental income from the ADU in the backyard covered a huge chunk of the homeowner’s mortgage—sometimes nearly all of it.
That’s when it clicked: ADUs aren’t just cute little cottages or bonus spaces. They’re a strategic real estate tool!
(An ADU one of my investor clients is building)
From there, I started working with investors who were buying homes specifically to build ADUs in the backyard, essentially creating their own small multifamily properties. That idea—turning a single-family lot into a multi-unit income generator—is what got me hooked.
In Atlanta, we’re fortunate. The city allows homeowners to build both a guest house and an ADU on a single lot. That means up to three units on one residential parcel. I’ve personally built two ADUs myself, so I’ve been in the trenches. Each one cost me around $300 per square foot to build, which is an important number to understand if you’re considering this route.
Here’s one of the key principles I share with clients: ADUs only make sense financially if they’re cheaper to build than to buy. That means you should target neighborhoods where small homes are selling well north of $300 per square foot. When that condition is met, you’re not just building an extra unit—you’re creating instant equity and long-term income.
ADUs are incredibly versatile. You can:
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Rent them out long-term for stable monthly income
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Use them as short-term rentals for even higher cash flow (with the right permitting)
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Live in one unit and rent the other—classic house hacking
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Create a flexible setup for multigenerational living, an office, or a guest space
They’re also a great answer to Atlanta’s need for more “missing middle” housing—that in-between space between large single-family homes and dense apartment buildings.
Right now in Atlanta, you can build up to 750 square feet for an ADU. That’s enough space to fit a 2-bedroom, 2-bath layout, which tends to maximize rental income. Even better, there’s a proposal in the works to increase that limit to 850 square feet, which could pass as early as summer 2025.
(Kitchen in one of our recent ADU's)
If you’re thinking about ADUs, there are a few things to keep in mind:
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Corner lots or lots with street frontage on both front and back are ideal
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Having the right contractor matters—I can connect you with pros who specialize in ADUs
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I can also share rental comps for ADUs (both short- and long-term), and show you real-world examples of what others have done
(Excellent corner lot ADU layout with separate parking)
Frequently Asked Questions About Building ADUs in Atlanta
Where can you build an ADU in Atlanta?
ADUs are allowed in most residential areas of Atlanta, particularly in zones R4, R4A, and R5, which together cover over 60% of residential lots in the city. These zones make it relatively straightforward for homeowners and investors to add a rentable unit to their property.
What can I build?
In Atlanta, you can build an ADU up to 750 square feet—which is enough for a 2-bedroom, 2-bath layout if designed efficiently. A proposed zoning change could increase the max size to 850 square feet as early as summer 2025.
How is an ADU different from other housing types?
ADUs are legally rentable, self-contained dwelling units. They can have a separate address and separate utility meters, but they cannot be subdivided or sold separately from the main home. Think of it as adding a fully functional small house to your lot—without creating a new parcel.
How much does it cost to build an ADU?
Most ADUs in Atlanta will cost in the $200,000 to $260,000 range, depending on the size, finishes, and site conditions. That works out to about $300 per square foot, which is often far less than buying a standalone property in the same neighborhood.
How long does it take?
Expect the full process to take 8 to 12 months, broken down roughly as follows:
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Planning & Design: 1+ month
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Permitting: 2.5+ months
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Construction: 5–8 months
How can I finance an ADU?
There are several financing options available, including:
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Construction loans
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Home Equity Lines of Credit (HELOCs)
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Personal or business lines of credit
I can help you evaluate which approach fits your situation best.
How are ADUs appraised?
Appraising ADUs can be tricky, as comparable sales are limited. However, in many cases, appraisers are allowed to treat the property as a duplex, especially if both the main home and ADU are separately metered and rentable. Having an agent who understands this process is crucial when planning for resale or refinancing.
Whether you're an investor looking to build cash-flowing properties or a homeowner looking to maximize your lot’s potential, ADUs are one of the best tools we have right now in Atlanta real estate.
Let’s talk if you're ready to explore building—or buying—with ADUs in mind.
