Accessory dwelling units (ADUs)—smaller living units on the property of a primary residence—are becoming popular options to mitigate the housing shortage on the Seacoast. Realtor Jenn Madden, principal owner and managing broker of Madden Group in Rye, shares her expertise on these profitable and functional dwellings.
What do you think is driving the high demand for ADUs?
Affordable housing is limited in this area. When homeowners rent out ADUs, they solve two prongs of the problem: they supply extra income in rent if they are struggling to make their housing costs; they also provide additional options for renters, usually at a more affordable rate than a conventional apartment.
Besides their function as rentals, what other purposes do ADUs serve?
Providing housing for family members is the second most common use for an ADU. It is a perfect solution for homeowners with aging parents needing to move out of their own home. An ADU allows the parents to live on their children’s property, while still enjoying their own space. It can also work the other way, as an ideal lower-cost option for adult children looking to live on their own.
When aging parents move into an ADU, how does that help the housing shortage?
When the parents sell their home to move into their child’s ADU, it makes another home available on the market. It creates supply, which this area needs right now.
Parts of the main house are sometimes converted into an ADU. How does this work?
ADUs can be carved out within the existing home. Sometimes they are added on, but often homeowners will convert a room or rooms that have an exterior door and then add a kitchen and bathroom. This makes a nice little studio apartment.
New state legislation in New Hampshire allows detached ADUs in addition to those attached to the main dwelling. How does this add to their value?
The ability to build a separate ADU instead of converting an existing structure gives the homeowner another option. A detached ADU offers more privacy for the residents of the unit and for the homeowners. Garages and other structures are occasionally converted, but building a new structure is more common. The return on the investment comes when the ADU is rented, or when the homeowner sells the property. Local zoning ordinances still apply.
How have ADUs benefited your clients?
One client purchased a home where she could use the first floor as an ADU for her mother-in-law. This allows the mother-in-law to live on the property but still have her own entrance and plenty of privacy. Another homeowner is out of the country a lot. It’s helpful to him to have someone staying on the property to keep an eye on it. It’s like having a property manager. And one homeowner converted part of her garage into an apartment when her taxes went up. Now, she offsets the added cost with rental income.
There are numerous pros to ADUs. Are they any cons?
The main complaint is NIMBY—not in my back yard. Everyone wants to help the housing situation, but no one wants the added traffic or the extra cars parked outside.
What is the most important thing for people to know about renting out an ADU?
The owner of the house must occupy one or the other of the dwellings. The owner can live in the main house and rent out the ADU or live in the ADU and rent out the big house.
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