ADU ROI Calculator
Welcome to our ADU ROI Calculator, specifically designed for homeowners in Colorado! Accessory Dwelling Units (ADUs) are gaining popularity as a valuable investment strategy. They not only provide a source of rental income but also significantly enhance the overall value of your property.
Whether you’re considering building a granny flat, a backyard cottage, or a basement apartment, an ADU can transform your unused space into a money-making asset.
While our calculator is tailored to the unique market conditions and regulations in Colorado, it can also serve as a useful tool for understanding potential ROI on ADUs across the United States.
Let’s explore how much profit your property could be generating for you.
Ready to build an ADU in Colorado?
At Little Home Builder, we specialize in new ADU construction in Colorado. Our process is simple, affordable and timely. Get started with a free consultation today.
Get Started with a Free Consultation
"Christy and the Little Home Builder team are efficient, responsive and thorough. I highly recommend them for anyone looking to build an ADU in Denver."
Our Process: Customizing Your ADU
At Little Home Builder, we offer a range of options for floor plans, exteriors, and interiors to customize your ADU. This ensures a quick and cost-effective tiny home construction process.
All our models are available in three different exterior styles: Urban Farmhouse, Modern Shed, and Craftsman Cottage.
Personalize your tiny home by selecting a color package for the interior finishes to make it feel like home.
Our Models
Autumn
1 bed / 1 bath
Detached ADU
576 sq ft
David
2 bed / 1 bath
Detached ADU
742 sq ft
William
1 bed / 1 bath
Above-garage ADU
576 sq ft
Stick Built Quality Construction
Stick-built ADUs are constructed the same way your house was built with craftsmanship and based on today’s building code. It’s clear what you’re getting when you build in the traditional way. Lenders are comfortable with the building method and should have no issue providing financing. Appraisers will have no issue evaluating this structure when it’s time to sell or refinance. Once the plan is permitted, you can be confident it was designed to Colorado’s efficiency standards and to withstand Colorado weather.
ROI Calculator Notes
- All results shown are an average, based on the numbers entered into the calculator, which include: one or two bedroom ADU, location of ADU and loan length.
- ROI reflects, based on the information entered into the ROI calculator, what an individual could generate on their investment when building an ADU on their property and renting it out.
- Other assumptions taken into account in the calculations:
- The cost of an Accessory Dwelling Unit (ADU) is based on whether it is a one-bedroom ($200,000) or two-bedroom ($250,000). These prices are general estimates provided by Little Home Builder.
- Monthly income (rent) has been calculated by taking the average listing price of five rentals within the selected city during February 2024, as listed on rent.com.
- Monthly cost was determined by adding the cost of the ADU ($200,000 for a one-bedroom or $250,000 for a two-bedroom) to the cost of interest for a loan of that duration, then dividing by the total length of financing.
- The cost of interest for a loan was calculated by multiplying the ADU cost by the interest rate. The interest rate used was 9.09% for a 15-year or 20-year HELOC loan, as reported in Bankrate’s article, ‘Best home equity line of credit (HELOC) rates for February 2024’
- Gross monthly profit was computed by subtracting the monthly cost from the monthly rental income.
- Gross annual profit was calculated by multiplying the gross monthly profit by 12.
- Although we’ve tried to be as rigorous as possible to ensure the accuracy of this calculator, the calculations are estimates and do not constitute a formal offer or promise any certain results. If you need a personalized quote, please contact us at christy@littlehomebuilder.com.
- Little Home Builder is not legally responsible for any reliances, assumptions or actions taken on the basis of the ROI calculator or the results thereof result.
**Legal Disclaimer**
The information provided by the Return on Investment (ROI) calculator on this website, operated by Little Home Builder, is intended for illustrative and general information purposes only. It does not constitute financial advice.
The data generated by the ROI calculator should not be relied upon as a sole source for your investment decisions regarding Accessory Dwelling Units (ADUs). All calculations made by this tool are based on user-inputted data and certain assumptions, which may not be accurate or applicable to your specific circumstances.
While we strive to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
Before making any financial decisions or commitments based on the ROI calculator’s output, we strongly recommend consulting a qualified financial advisor or other appropriate professional who can provide tailored advice based on your individual circumstances and objectives. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this ROI calculator.
By using this ROI calculator, you agree to accept this disclaimer in full. If you disagree with any part of this disclaimer, do not use our ROI calculator. This disclaimer is subject to change without notice. Please check this space regularly for updates or changes.