Build cost: Construction: ADU Advise 2026 regional planning model, adjusted for the small-project cost structure of an ADU. It is not a construction-cost index or bid. Site conditions and written bids control.. Permit and agency fees: planning placeholder equal to 5.5% of modeled construction cost, rounded to $500 and limited to $5,000-$25,000. Design: 9% planning allowance. Utility and site work: 5% planning allowance. Contingency: 12%. Confirm each category with the property jurisdiction and project professionals.
Scope realism: Seven selected plan, utility, site, solar, and access assumptions add $73,500 before contingency and extend the timeline to 10-15 months. Risk score: 5/15; each selection contributes 0 to 3 points.
ROI and cash flow: Loan rate: Freddie Mac 30-year fixed average 6.65% (June 25, 2026), published through FRED. Vacancy 7%: CoStar Q1 2025 residential vacancy (tight markets run 4-6%). Maintenance 5%: BiggerPockets rental expense survey 2024. Rent growth 3.2%/yr: Zillow ZORI 10-yr CAGR. Home value uplift: blended income approach (rent ÷ 4.5% cap rate) + Freddie Mac cost approach. Appreciation 4.1%/yr: Case-Shiller 20-city HPI 10-yr CAGR (2025). Depreciation: IRS Pub. 527 - 27.5-yr straight-line on 82% of build cost. Operating reserves use the selected vacancy, maintenance, tax, insurance, and management inputs above.
Rent source: HUD FY 2026 Small Area Fair Market Rent: median 2-bedroom benchmark across ZIPs in California. This is a regional fallback, not a ZIP-level asking-rent appraisal. Updated 2026-05-21.
Planning estimate only. A contractor bid should confirm plans, utility runs, soils/survey needs, jurisdiction fees, finish selections, access, slope, fire/flood/coastal overlays, and contingency.