Question 1

What is the ROI on an ADU in Southern California?

Accepted Answer

A typical garage conversion in Southern California ($80K–$150K) renting for $1,500–$2,200/month can generate an annual ROI of 12–22%. A new construction ADU ($150K–$250K) renting for $2,000–$3,500/month generates 10–17% annually. Both are significantly better returns than most investments, with the added benefit of property value appreciation.

Question 2

How much value does an ADU add to a property?

Accepted Answer

Appraisers typically value an ADU two ways: the income approach (roughly 150 times its monthly rent — a $2,000/month ADU adds about $300,000) and comparable sales (average price per square foot in your area times the ADU's size). In most Southern California neighborhoods an ADU adds $250,000–$450,000 in property value while also generating monthly rental cashflow.

Area	1 Bed/1 Bath	2 Bed/1 Bath	2 Bed/2 Bath
West LA / Santa Monica	$2,400–$3,200	$3,000–$4,000	$3,500–$4,800
Pasadena / Arcadia / Monrovia	$1,800–$2,400	$2,200–$3,000	$2,800–$3,600
Anaheim / Orange County	$1,800–$2,400	$2,200–$2,900	$2,700–$3,500
Inland Empire	$1,400–$1,900	$1,700–$2,200	$2,000–$2,700

ADU ROI Calculator

ADU Rental Income by Region (2026)

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