Affordable ADU’s in 2025: Designs That Fit Your Backyard and Budget

Have you been dreaming of ways to make your property work harder for you?

Accessory Dwelling Units (ADU’s) are quickly becoming one of the smartest and most practical solutions for homeowners and investors.

Whether you’re dreaming of extra rental income, a cozy extra space for family, or a boost to your property’s long-term value, the wide range of ADU’s out there today, offer an incredible opportunity.

In this guide, we’ll break down the different types of ADU’s and show you how they can bring real, tangible benefits to your home or investment strategy.

Let’s do this…

Share with a friend:

• Pinterest
• Facebook
• LinkedIn
• X

What is an ADU?

An accessory dwelling unit (ADU) is a secondary home unit built on the same lot as a primary residence.

They are often called granny flats, guest houses, backyard cottages, or in-law units.

ADU’s typically have their own entrance, kitchen or kitchenette, bathroom, and living space.

The main difference between an ADU and a traditional rental property is that it shares land with the main house and does not require any additional land purchase.

Let’s walk through the most common ADU types so you can get a clear view of what each one offers—and what it might cost to bring to life.

Common Types of ADU’s and Their Costs

Prefab ADU’s

Prefab ADUs are basically ready-made homes built in a factory and dropped into your backyard.

They’re popular because you get a sleek, modern space installed in weeks — not months. If you want something fast and stylish without all the hassle of custom builds, prefab is a smart pick.

• What it is: Pre-manufactured units built in a factory and installed on your property.
• What it looks like: Imagine a sleek, modern studio home with clean lines and professional finishes. Installation takes weeks, not months.
• Estimated Cost: $50,000–$200,000 (including site prep and delivery).

Shipping Container Homes

Shipping containers aren’t just for cargo anymore. Converted into homes, this is a fairly new trend offering a sturdy, eco-friendly, and surprisingly affordable option.

Their industrial look may not be for everyone, but if you want something unique and green, container homes are catching on fast.

• What it is: Repurposed steel containers outfitted as stylish, durable living spaces.
• What it looks like: A compact, minimalistic layout with an industrial-modern aesthetic, often paired with eco-friendly finishes.
• Estimated Cost: $20,000–$150,000, depending on size and customization.

Mini Barndominiums

Mini barndos combine those lovely rustic barn vibes with modern comforts. Think sleek farmhouse.

They’re compact, more affordable than some other home builds, and have open floor plans that work well for guest houses or rentals. If you like that mix of cozy charm and large, open spaces, these are definitely worth a look.

• What it is: Tiny barn-style homes with open interiors designed for residential living.
• What it looks like: Rustic yet chic interiors featuring high ceilings, wooden beams, and lots of natural light.
• Estimated Cost: $50,000–$120,000 for a 600 sq. ft. unit.

Obsessed with barndominiums? Here’s everything you need to know.

Carriage Houses

Carriage houses started as spaces above livestock stables and have evolved into stylish little homes, usually above garages in older or historic home types.

They’re a classic ADU choice, if you have one, especially in older neighborhoods.

The perfect option if you want something with character and separate from the main house.

• What it is: ADUs located beside or above a detached garage, designed for living.
• What it looks like: A private haven with historic charm that often blends seamlessly with the main home’s architecture.
• Estimated Cost: $80,000–$200,000 for renovation or construction.

Barn Conversions

Got an old barn sitting unused?

Turning it into a livable ADU is a smart way to preserve it and make if more functional at the same time.

Barn conversions have a kind of “historic charm” and are the perfect base to create something unique.

• What it is: Existing barns retrofitted as livable spaces.
• What it looks like: An expansive, rustic interior blending exposed wood and open layouts with modern comfort.
• Estimated Cost: $100,000–$250,000, depending on modifications needed.

Above-Garage ADU’s

Building an ADU above your existing garage is a clever way to add space without eating up yard or driveway.

This type is popular in neighborhoods where land is tight and every square foot counts.

• What it is: A second-story living unit built on top of an existing garage.
• What it looks like: Smartly designed small apartments with premium views, perfect for compact living.
• Estimated Cost: $100,000–$250,000, depending on square footage.

Attached In-Law Additions

An attached in-law suite is an addition to your main home. One with its own entrance, ideal for multigenerational living.

It keeps family close but gives everyone their privacy—a practical and popular choice for many homeowners.

• What it is: Ground-level units with a separate entrance, attached to the main home.
• What it looks like: A fully outfitted space, great for independent living while staying close to family.
• Estimated Cost: $80,000–$150,000 for 500 sq. ft. additions.

Junior ADUs (JADUs)

JADUs are tiny adorable units carved out inside your existing home or added to another space on the lot—this can mean converting a spare bedroom or part of the garage.

They’re likely the most affordable and easiest ADU type on the list, perfect if you want to dip your toes in to the ADU market without a huge budget.

• What it is: Compact ADUs (under 500 sq. ft.), carved from garage or bedroom space in an existing home.
• What it looks like: Efficient and functional spaces using creative design to maximize square footage.
• Estimated Cost: $20,000–$50,000, depending on layout changes.

Tiny Homes (Either On Wheels Or Foundation)

Tiny homes focus on simplicity and efficiency.

Whether they’re on wheels or set on a foundation, these small spaces appeal to those wanting to downsize or really embrace minimalist living.

They’re flexible, but keep in mind some local rules might limit tiny homes on wheels.

• What it is: Small-footprint homes under 400 sq. ft., either on wheels or foundations.
• What it looks like: A sleek, highly efficient design featuring multifunctional furniture and a focus on minimalism.
• Estimated Cost: $30,000–$120,000 for on-foundation versions.

Garage Conversions

Converting your garage into an ADU is one of the most budget-friendly ways to add this type of living space.

It’s a smart way to repurpose an underused area, turning it from storage or parking into a fully functional rental or guest suite that can potentially generate some income.

• What it is: Turning an existing garage into a livable space.
• What it looks like: Vibrant one-bedroom or studio units, repurposing pre-existing square footage.
• Estimated Cost: $15,000–$80,000, depending on upgrades needed.

Quonset Huts

Quonset huts are those distinctive semi-circular steel buildings you might’ve seen previously only on farms or military bases.

Repurposed as ADUs, they can offer a durable, weather-resistant home with a unique look. If you want something different and a bit rugged, these are worth exploring.

• What it is: Semi-cylindrical steel structures redesigned as durable homes.
• What it looks like: Open layouts with unique curved designs, reminiscent of industrial architecture.
• Estimated Cost: $30,000–$150,000.

Unique Housing ADU Types

Basement Apartments offer high ROI but require significant remodeling to meet housing codes.

These weren’t included in the above list as they are typically not reflected in the home’s square footage.

From an appraisal / value standpoint, only some of the cost may be absorbed in the value.

For example, if you have 1000 sq ft basement that costs $40,000 to finish, you’re likely to get a fraction of that back when it comes time for an appraisal.

Yurt and Dome Homes deliver a unique living experience, though resale value is unpredictable.

Additionally, these types of structures might not be considered a permanent fixture due to their unconventional design and construction.

Yurts and some dome may be classified as temporary structures because they are often easy to dismantle or relocate, making them less likely to be considered “permanent housing” by appraisers or lenders.

This distinction could impact both financing options and property value assessments.

Of course, they can still add some value to the enjoyment of your home!

ADU’s As An Investment Opportunity

ADUs aren’t just about adding space—they’re about adding value.

Related Posts:

With more cities easing zoning rules and the demand for flexible housing on the rise, homeowners are turning ADUs into rental income, long-term investments, and solutions for multigenerational living.

Whether it’s a short-term Airbnb or a permanent setup for family, an ADU could help offset your mortgage or boost resale potential.

They’re a practical way to make your property work harder, especially in today’s market.