Convert your garage into an income-generating asset.
Harness the potential of your property and make it work for you. Learn how to start generating additional passive income by converting your garage into a livable space perfect for tenants!



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ADUs (accessory dwelling units) are quickly becoming the hottest trend in the housing industry and real estate market right now.
These small dwellings offer homeowners a variety of benefits, including additional income, increased home value, and greater flexibility. ADUs can be used as rental properties, offices, or even guest houses.
They are also a great way to expand your living space without having to undergo an expensive remodel.
Plus, with new laws improving the process and policies in creating ADU in California, these little dwellings are becoming more and more attractive for homeowners and real estate investors.


ADUs are quickly becoming the hottest trend in the housing industry and real estate market right now.
These small dwellings offer homeowners a variety of benefits, including additional income, increased home value, and greater flexibility. ADUs can be used as rental properties, offices, or even guest houses.
For those who live on their own, they offer much needed extra space to host family members or visitors while still maintaining privacy and independence. In addition, they can serve as aging-in-place solutions for elderly family members who may not require full time assistance but need help with living expenses.
With new laws improving the process and policies in creating ADU in California, these little dwellings are becoming more and more attractive for homeowners and real estate investors.
a. Detached ADU. Detached ADUs are the most common type of accessory dwelling units and are completely separate from the main house. Typically, they have their own entrance and offer additional living space without changing the overall structure of the main building.
b. Attached ADU. Attached ADU can come in the form of an apartment above a garage or as a side or rear extension connected to the main home. It must have a separate entrance and include amenities like kitchens and bathrooms.
c. Garage Conversion. Garage conversions, also known as interior conversions, are an increasingly popular way for homeowners to add extra living space to their property without making any major structural changes to the main building. This type of project involves transforming an existing garage into a livable space - such as adding bedrooms or turning it into a studio apartment. This type of conversion requires less paperwork when obtaining approval since it doesn’t involve making any permanent changes outside.
d. Junior ADU. They are typically smaller in size than traditional ADUs. A JADU is a self-contained living unit that includes a kitchenette and a separate entrance. It is designed to be a small, independent living space that can provide affordable housing options for renters or family members, while still allowing the primary homeowner to occupy the main house.
A garage conversion could add up to 20 percent to the value of your home. That is why homeowners who are looking for an affordable way to add valuable and compliant living space are turning towards garage conversions.
Also, it has less complications in terms of planning and is less expensive compared to other types of additions like detached or attached ADUs. It's well worth considering if you want to stay within budget and still have a remarkable return on investment.
a. Lower Construction Cost. Using an existing attached and detached garage is a great way to save money while still achieving your desired building goals. With its walls, ceiling, and flooring already in place, you save a huge amount of money in terms of construction. You can then align this budget to remodel its interior to fit your lifestyle needs.
b. Connected Power and Sewer Sources. One major benefit of opting for a garage conversion is that it is already connected to existing power and sewer sources, meaning there is less disruption and mess associated with the project. This makes the entire conversion process much easier because the homeowner won't need to worry about rerouting plumbing or procuring materials for new electricity infrastructure. Furthermore, this kind of project can usually be conducted without needing any extra permits since it's considered a remodeling job.
c. Expedited Plan Check. With the State ADU Law in effect, approval of ADUs are streamlined and creation of such must not be unduly constrained. For a garage conversion, it may only require ministerial planning review since the project can be considered a remodeling project. With the new ADU rules in SB 897 AND AB 2221, approval processes for cities and municipalities have become even more convenient and ADU conversion-friendly.
d. Tailor the Design to Suit Individual Needs. Converting a garage into a usable space offers many benefits, but perhaps one of the most important benefits is the ability to customize and tailor the design to suit the individual needs of elderly persons and persons with disabilities. With this type of conversion, you have the opportunity to configure the living space to meet accessibility challenges while still having creative control over other areas. The configuration may include adding ramps and handrails, ensuring that cabinet doors open easily, and increasing light sources throughout. By making sure all of these criteria are met, you can create a safe, comfortable, and well-designed area for loved ones despite any physical limitations they have.
e. Provides passive income through rentals. Converting a garage into an apartment can be an excellent way to gain passive income from renting. It is also relatively low cost compared to construction of a building from scratch. The benefit of doing this is that you can convert the garage into a separate living space for rentals and become your own landlord. Any savvy investor would be wise to look into the potential of using this strategy as it has the potential for significant returns - while still having the security of holding onto your own property.
a. Hiring Inexperienced Architect And Designer. Building regulations for Accessory Dwelling Units (ADUs) differ in many ways from regulations for a standard single-family home. With the proliferation of ADU regulations, experts warn against hiring inexperienced designers or architects and instead emphasize the need for a professional that understands cities' specific requirements in order to ensure that everything is compliant and up to the standards.
Generally speaking, due to its size and purpose, ADUs also allow for greater architectural flexibility than a traditional building which can be built onto or away from an existing structure in order to make the most out of limited space. While ADUs present challenges in efficient design and storage solution, here is where the expertise of an experienced ADU designer becomes highly valuable.
An ADU designer must account the following:
City Regulations
Maximization of Space
Budget
Long-term Return on Investment
Investing wisely can lead to valuable long-term returns when properly managed by those who have experience with regulatory and design complexities associated with building Accessory Dwelling Units (ADUs).
b. Hiring Inexperienced Contractor. Hiring an inexperienced contractor can cause unforeseen setbacks, ultimately leading to delays in the project's completion. It is essential that any contractor chosen for the job be knowledgeable and skilled at the task at hand for the successful completion of the project.
Homeowners should avoid hiring inexperienced or unlicensed contractors for ADU (Additional Dwelling Unit) construction. Before hiring a contractor, always do an extensive research to determine their track record and experience in building this type of special structure. Make sure to properly analyze the contract for reliability and accuracy of its terms. Also, review any waivers of warranty or liability that may be included with the deal. Additionally, check references from past clients to ensure that the contractor meets high standards of quality when it comes to project completion, communication and attention to detail.
Hiring a contractor who is experienced in ADU projects not only provides more assurance of success but also ensures that the process will go more smoothly and quickly by avoiding any issues related to inexperience. Preferably, a contractor must possess the following:
Knowledge on City RegulationsComplete Team of Professionals who are also Knowledgeable in ADUFully Insured And BondedExperience building an ADU in your ciity
c. Thinking You Can Do It Yourself. Constructing an ADU is no small feat, and it isn't a job just anyone can take on. Standards and specific regulations must be followed, health hazards evaluated, wires installed correctly—all while factoring in plumbing issues as well. Not to mention essential work such as gas fitting or electrical works that require certified personnel. To ensure everything goes smoothly and safely, don’t underestimate the value of hiring a professional expert who possesses knowledge far beyond that of a DIYer; you may end up spending more upfront but will save time and money down the road.
d. Not Separating The Utility Meters. When constructing an ADU, it's wise to invest in a separate utility meter. Doing so pays off in the long run - tenants will be able independently pay their own bills and enjoy greater independence! You’ll also save yourself time and stress down the road by allowing each tenant to cover their own bills, instead of having them funnel through you.
e. Underestimating The Project Cost. When it comes to garage conversions, cutting corners isn't an option. Any quality garage conversion project is not going to be cheap. Also, miscellaneous expenses can add up and without the right budget in place, a project could remain unfinished for years on end.
Homeowners often face the unpleasant surprise of discovering that their project costs much more than initially estimated. These unpleasant surprises could be due to mold or pest infestation among others. Unfortunately these unwelcome guests might add additional costs to the project that weren't anticipated.
The initial estimate is only an educated guess based on the initial property check, and even after consulting with an architect or contractor there can still be a gap between this number and what you ultimately pay for your dream conversion. It's always wise to factor in at least 20-25% beyond the predicted cost if working from an estimation – consider it insurance against those unplanned expenses.
It's also important to know the difference between an estimate and a quotation. Estimates can give you insight as to what your total cost could be for any given project, but quotations are legally binding commitments indicating exactly how much will be charged in the end.
Average Garage Area: 400 sq ft
Handicap Ramp At Front Door
Bathroom with Curbless shower with double Linear Drain and safety bars
LVP flooring and Heating Floor
Mini split Air Conditioner
Smart Thermostat
Handicap Kitchen
Handicap Laundry Room
Smart Storage Closet
36” Interior Door
Smart Lighting
Average Garage Area: 400 sq ft
Soundproof Sharing Wall
Kitchen Storage Space
Curbless Shower Bathroom
Internet Connectivity
Laundry Room
Walk-in Closet
Smart Lighting
Mini Split Air conditioner
Own Utility Meters
Patio Door
Small Yard
Exterior Water Faucet
In this article, we’ve discussed the do’s and don'ts of doing a garage conversion and why many homeowners in California are considering converting their garage into a rental property that provides passive income.
We also learned the ideal features of an ADU Garage Conversion that is perfect for parents and tenants. With these ideas, you are already on your way towards another stream of income.
Harness the potential of your property and make it work for you. Start generating additional passive income by converting your garage into a livable space perfect for tenants!


