Learn · Rental Income

An ADU earns its keep
twice over.

A second unit on your lot can bring in rent, and it adds permitted, livable square footage to a property you already own. What that is worth depends on your street and what you want the unit to do — which is a conversation, not a calculator.

Why a detached unit holds its value

An ADU is not a converted basement or a room over the garage. It is a separate, permitted dwelling with its own entrance — and that is the difference a tenant, an appraiser and a future buyer all price differently.

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A simple ROI framework

Once you have a rent figure you trust, the arithmetic is short. Put your own number in the first row.

Annual income estimate

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Does not include property tax impact, insurance adjustment, or income tax. Consult your accountant for net-of-tax returns.

How that compares

ADU rental yield

Net annual income ÷ total project cost, pre-tax — run it with your own comp

your number

S&P 500 (10-yr avg)

Before inflation, with volatility

~10%

High-yield savings

Current rates, fully taxable

4–5%

Home equity (sitting)

Earns nothing until you sell

0%

An ADU converts idle home equity into a cash-flowing asset — and unlike stocks, it's physically attached to your property, appreciating alongside it.

How an ADU affects property value

Beyond rental income, an ADU changes what your property is worth.

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See what your lot can support.

The first step is knowing which plan sizes fit your property. Our free finder checks your lot against the zoning your own jurisdiction publishes — eighteen of them across the Front Range.

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