The first door
An owner who expected to lose money every month on a comparable rental built a two-bedroom ADU on land he already owned instead — for about half the price of the house he didn’t buy.
~50%Of the cost to buy a comparable rental
The Investor’s ADU Guide
ADU built for rental income
Building a rental ADU people want to live in
Underwrite the deal honestly, then build a unit tenants choose and stay in — for no more than an ordinary one costs.
We’ve built dozens of ADUs for every application. This guide is our team’s compilation of thousands of hours of ADU design and building — everything we know about building a rental that performs: how to plan it, design it, and build it right.
ADU built for rental incomeWho this guide is for
- You own property with room for a second unit and want cash flow without buying another house.
- You want real underwriting — vacancy, taxes, reserves — not rent-minus-mortgage marketing math.
- You want to build with little or no cash in, using equity you already have.
What’s inside
In the order a builder would walk you through it.
Add a door, or buy one?
Why land you already own changes the math — and when an ADU is not the right investment.
Underwrite it like a lender would
A fully loaded model with every metric explained, set up the way most owners actually build.
The 1% rule, BRRRR, and time
Where ADUs land on the classic rules of thumb, the ADU version of BRRRR, and what a century of rent data says.
Designing a unit people want to live in
Size, layout, privacy, durable finishes, and the features tenants pay for.
Site costs nobody warns you about
Septic, electrical service, separate meters and city fees — before they reach your numbers.
Your strategy
Long-term, mid-term, short-term, or house hack — with a decision helper.
Building right without overpaying
Spend where tenants and turnover feel it; save where they don’t.
Financing with little or no cash in
Second-position mortgages explained, an equity calculator, and the risks to plan for.
Two real projects
Two investors, two strategies, and the ratios that travel to any market.
Your spec checklist and rental brief
The unit, the tenant and the numbers it has to hit — on one page for your builder.
Sample pages
Built to be used, not just read.
Fully loaded underwriting
Rent over the payment and cash flow after every expense, side by side.
Buy a door vs. build a door
Cash to close, monthly cash flow and day-one equity for both paths.
Where it goes over time
Rent growth and a refinance, projected from your own numbers.
From one of our builds
Names and details are withheld for privacy. The full story is in the guide.
Common questions
About this guide
Are the numbers specific to one market?
No. Rents and build costs vary by region, so every tool uses your own figures. The case studies are presented as ratios — cost to build versus cost to buy, rent against cost — that you can test anywhere.
Can I really build with no cash in?
Many owners do, by borrowing against equity they already have through a second-position mortgage. The guide explains how it works, includes an equity calculator, and is clear about the risks.
Is this financial advice?
No. It’s builder-written education and tools. Confirm rents with local comparables, costs with a fixed-price quote, and financing with a lender.
How do I get the guide?
Right after checkout you get access to the guide in your web browser — on a computer, tablet or phone. Your answers in the calculators and worksheets save on your device as you go, and your brief prints or saves as a PDF.
What if it isn’t helpful?
If the guide doesn’t leave you with a clearer, more confident plan, reply to your guide email within 30 days for a full refund. You keep everything.
Free resources