Ask three contractors what an ADU costs and you will get a lowball, a guess, and a shrug. Here is the honest version, from a licensed general contractor that builds ADUs on California’s Central Coast: most homeowners will spend between $130,000 and $500,000+, and where you land in that range is determined by five decisions this guide walks through.
The numbers below reflect what projects actually cost in 2026 on the Monterey Peninsula and Salinas Valley — coastal California pricing. Inland markets run somewhat less; the Bay Area and Los Angeles often run more. Use the structure of this guide anywhere; use the numbers as a realistic coastal-California baseline.
ADU cost by type
The single biggest cost decision is the type of ADU you build:
- Garage conversion: $130,000–$220,000. The structure exists — you are paying for insulation, systems, kitchen, bath, and finishes.
- Basement or interior conversion / JADU: $80,000–$180,000. The cheapest legal unit, limited to space you already have.
- Attached ADU (addition with separate entrance): $250,000–$400,000. New construction that shares a wall and often utilities.
- Detached ADU, one story: $300,000–$500,000. A complete small house — foundation, envelope, systems, and finishes from zero.
- Detached ADU, two story or complex site: $450,000–$650,000+. Slopes, retaining, long utility runs, and view-driven design add real money.
Cost per square foot: the honest math
For new detached construction on the Central Coast, realistic all-in construction pricing runs roughly $400–$650 per square foot. Notice something important: smaller units cost more per square foot, not less. A 400-square-foot studio still needs a full kitchen, a full bathroom, a water heater, an electrical panel or subpanel, and utility connections — the expensive rooms and systems are all there, just amortized over fewer square feet.
This is why a 750-square-foot one-bedroom is often the value sweet spot: big enough to spread fixed costs and rent as a real one-bedroom, small enough to stay under the 750-square-foot impact-fee waiver. It is also why per-square-foot quotes are only comparable when the scope behind them is itemized — a number without a line-item scope is marketing, not math.
The line items people forget
Beyond the construction contract, budget for:
- Design and engineering: $8,000–$25,000 for plans, structural engineering, and Title 24 energy documentation.
- Permits and fees: commonly $5,000–$15,000. Impact fees are waived under 750 square feet; school and utility fees can still apply.
- Utility connections: $10,000–$40,000 depending on trenching distance, panel capacity, and whether sewer or septic is involved.
- Site work: driveways, paths, grading, drainage, landscaping repair — $10,000–$50,000 on real projects.
- Appliances and window coverings: $5,000–$15,000, always forgotten, always needed.
- Contingency: hold 10–15%. Every honest builder tells you this; every experienced owner is glad they listened.
What moves the number most
Five decisions control the budget. Type (conversion vs. new detached) is the biggest lever by far. Size is second — but remember the per-square-foot math above. Site is third: a flat backyard with utilities 30 feet away builds cheap; a sloped lot with a 120-foot trench does not. Finish level is fourth — the spread between builder-grade and custom finishes on a small home is $30,000–$80,000. And design complexity is fifth: simple rooflines and rectangular footprints build efficiently; articulated plans and custom glazing do not. None of these choices are wrong — they just belong in the budget conversation on day one.
Is it worth it? The return math
On the Monterey Peninsula, one-bedroom ADUs command strong long-term rents relative to almost any California market outside the urban cores. Against a garage conversion in the $150,000s, rental income frequently produces a payback period competitive with any conventional investment — with the asset appreciating alongside the property. For a detached unit at $400,000+, the pure-rental math is longer, but that is rarely the whole story: multigenerational housing, aging parents nearby, adult kids launching, and resale value all count. An appraisal-visible legal second unit is durable value in a housing-short region.
How to budget a real project
Start with a parcel check and a line-item feasibility budget from a licensed local builder — not a per-square-foot phone quote. A proper feasibility pass prices your site conditions, your utility runs, and your target size and finish level, and it costs you a site visit. RC Builders Inc (CSLB License #1081425) provides exactly that across Monterey County, and the companion guides on Monterey County ADU rules and the ADU construction process cover the rest of the journey.
Frequently Asked Questions
Converting existing space. A garage conversion ($130,000–$220,000) or interior/JADU conversion ($80,000–$180,000) reuses the structure you already own. If the garage is sound and well-located, it is almost always the fastest payback in the ADU family.
Because kitchens, bathrooms, and utility connections are fixed costs that do not shrink with the floor plan. A 400-square-foot unit carries nearly the same systems cost as an 800-square-foot unit, spread over half the area.
Most owners use home equity (HELOC or cash-out refinance), renovation loans, or construction loans; California has also offered ADU grant programs at times, worth checking at application season. Lenders increasingly count projected ADU rent in qualifying — ask specifically.
Only on the new construction’s assessed value — your existing home is not reassessed. The added tax is typically a small fraction of the unit’s rental income.
Typically 8–12 months total: 2–4 months of design and permitting, then 3–4 months of construction for a garage conversion or 5–8 months for a detached unit.