Why Now is the Perfect Time to Invest in an ADU in Utah
Utah’s housing market is booming, driven by rapid population growth, major economic developments, and exciting upcoming events like the Winter Olympics. For homeowners, this presents a unique opportunity to build wealth, increase property value, and generate rental income by investing in an Accessory Dwelling Unit (ADU).
At Citizen Builders, we specialize in constructing high-quality, custom ADUs tailored to your vision. Here’s why now is the perfect time to invest in an ADU, the costs involved, and how this smart addition can secure your financial future.
Utah’s Growth is Driving Demand for ADUs
Utah is one of the fastest-growing states in the U.S., and the demand for versatile, affordable housing options is only increasing. Here are a few reasons why building an ADU is a wise choice:
1. The Winter Olympics are on the Horizon
Utah is preparing for hosting the Winter Olympics in 2034, which would bring a surge in tourism, economic activity, and housing demand. ADUs are perfect for short-term rentals to capitalize on this influx of visitors.
2. Salt Lake City May Soon Host an NHL Team
The NHL is eyeing Salt Lake City as the home of a new hockey team, attracting sports fans, professionals, and tourists. An ADU near the city could be a valuable asset as demand for housing near major venues grows.
3. Silicon Slopes Expansion in Lehi
Lehi’s tech scene is thriving, with companies expanding their presence in the Silicon Slopes. This growth drives the need for housing for incoming professionals, making ADUs an appealing option for long-term rentals.
4. Downtown Salt Lake City Revitalization
With ongoing investments in residential, retail, and entertainment spaces, urban living is becoming increasingly desirable. ADUs provide an affordable yet high-quality option for housing in sought-after neighborhoods.
Why Building an ADU Makes Financial Sense
1. Generate Steady Income
An ADU creates a consistent revenue stream, whether rented out long-term or listed as a short-term rental. For example:
Long-Term Rentals: Earn $1,500–$2,500 per month, depending on location and size.
Short-Term Rentals: Charge $120–$250 per night, generating $26,000–$64,000 annually with a 70% occupancy rate.
2. Boost Your Property’s Value
Adding an ADU enhances your property’s overall value. Buyers are drawn to the flexibility an ADU offers, from rental income to additional living space.
3. Versatility for Your Family
ADUs can be used for:
Aging parents or adult children needing independent spaces.
A home office, gym, or guest suite.
Future downsizing opportunities, allowing you to live in the ADU while renting out the main house.
What Does It Cost to Build an ADU?
At Citizen Builders, the cost to build an ADU starts at $150,000 for a basic unit. However, a more typical budget is around $250,000, or $250 per square foot, for a high-quality, well-constructed unit of about 1,000 square feet.
Factors That Can Impact Costs
While $150,000 represents the starting price, your specific project may vary based on several factors:
Foundation Work
If a new foundation is required, costs will increase.
Utilities and Electrical Work
Connecting utilities can range significantly depending on the distance to the main lines. In some cases, electrical work alone could cost tens of thousands of dollars.
Size and Layout
A smaller unit will cost less, while larger or more complex designs increase the budget.
Material and Finish Choices
Higher-end finishes, energy-efficient windows, and upgraded appliances will add to the overall cost but improve long-term value.
Permits and Zoning
Local building regulations, permits, and inspections can influence both cost and timeline.
Important Disclaimer
The $150,000 starting cost reflects a basic ADU project with minimal features. The $250,000 average cost represents a high-quality build with standard finishes. Additional expenses may arise from factors like utility upgrades, foundation work, or premium materials. At Citizen Builders, we’ll work with you to develop a detailed, transparent estimate tailored to your vision and property.
How Quickly Can You Recover Your Investment?
Building an ADU isn’t just about upfront costs; it’s a long-term investment with steady returns.
Revenue Potential
Long-Term Rentals: Earn $1,500–$2,500/month ($18,000–$30,000 annually).
Short-Term Rentals: With nightly rates between $120 and $250, you could earn $26,000–$64,000 annually at 70% occupancy.
Break-Even Timeline
At $150,000 Investment:
Long-Term Rentals: 5–8 years.
Short-Term Rentals: 3–5 years.
At $250,000 Investment:
Long-Term Rentals: 8–12 years.
Short-Term Rentals: 5–7 years.
By leveraging platforms like Airbnb or taking advantage of long-term rental demand, you can expedite your return on investment.
Why Choose Citizen Builders for Your ADU?
At Citizen Builders, we don’t just build ADUs—we create tailored spaces designed to meet your needs and maximize your investment.
What Sets Us Apart
Expert Project Management: We handle permits, zoning, and utility work to make the process seamless for you.
Custom Designs: Your ADU will reflect your style, preferences, and goals.
Energy Efficiency: We use eco-friendly materials and designs to reduce utility costs.
High-Quality Craftsmanship: Our commitment to excellence ensures a product that stands the test of time.
Conclusion: The Time to Invest in an ADU is Now
Utah’s rapid growth and upcoming global events like the Winter Olympics make this the ideal time to invest in an ADU. With starting costs as low as $150,000 and an average cost of $250,000, an ADU provides rental income, boosts property value, and offers unmatched versatility for your family.
At Citizen Builders, we’re here to make your ADU vision a reality, from design to construction. Contact us today to schedule a consultation and take the first step toward securing your financial future with a high-quality, custom ADU.
