In Silicon Valley, almost every homeowner has heard the same thing:
“You should add an ADU — it’ll increase your home’s value.”
But as both an architect and real estate advisor, I can tell you:
Sometimes that’s true. Sometimes it quietly works against you.
After personally designing multiple ADU projects (both for clients and my own home), and selling several homes that struggled to sell because of poorly designed ADUs, I want to break it down simply for you:
1️⃣ Not All ADUs Are Created Equal
🔧 Attached ADUs often create better resale value.
- You maintain flexibility: the space can open into the main house or function as a private suite. Buyers with kids or multigenerational families love that adaptability.
🔧 Detached ADUs have limited buyer appeal in high-end homes.
- In luxury neighborhoods, most buyers are younger families paying $4M+. They value privacy.
The idea of renting out part of their own property isn’t attractive — they simply don’t need the rental income.
2️⃣ The Garage Conversion Mistake
We’ve sold multiple homes that previously failed to sell because the garage was converted into an ADU.
- On paper: great — “more living space.”
- In reality: buyers still expect a garage when buying.
- Even though many people never park in their garages, buyers psychologically expect that flexibility at purchase.
💡 Losing a garage often reduces sale price by roughly 6%. Yes, the ADU may add some value back, but you often just break even — or worse, struggle to sell at all.
3️⃣ How Big Should The ADU Be?
Another mistake I often see:
- Owners build oversized ADUs that dominate the backyard or take up too much of the total square footage.
As one real case:
- A 2,700 sq ft property:
- 2,000 sq ft main house + 700 sq ft ADU (2 bed, 1 bath ADU).
- Buyers consistently said: “I wish the ADU were smaller so the main house could be bigger.”
🎯 Rule of thumb:
- Keep ADU under 20% of total square footage.
- 1-bedroom ADUs often sell better than 2-bedroom ADUs.
4️⃣ Watch Backyard Space
- Many buyers highly value outdoor space for kids, gatherings, or simply aesthetics.
- An ADU that eats up most of the yard can make the property much harder to sell — even if you technically increased total living space.
5️⃣ The Power Of ADUs When Done Right
Even with these risks, ADUs remain a powerful tool when approached strategically:
- Cities allow reduced setbacks (only 4 ft vs 6 ft or more for main house).
- ADUs may bypass certain tree protection restrictions.
- ADUs often get faster permit review than full additions (sometimes weeks instead of 12+ months).
- In several cases, we’ve helped clients pre-sell homes using an ADU permit pathway, combining:
- Smart floor plan design
- Buyer feedback before construction
- Reduced holding time for developers
- → This created much stronger profit margins than traditional remodel or teardown options.
✅ The Bottom Line
ADUs can add flexibility and value — but only when thoughtfully designed.
As an architect-realtor, I help clients evaluate:
✅ Should you add an ADU or not?
✅ How big should it be?
✅ Where to place it?
✅ How will buyers react?
✅ Will it help or limit your future sale price?
Every property is different. Sometimes the best value is achieved without building the ADU at all.
👉 If you’re thinking about remodeling, adding an ADU, or simply wondering how to future-proof your property value — let’s talk. One design conversation can save you hundreds of thousands down the road.