When Pavel Kazenkov and his wife bought their home in Petworth in Northwest Washington in 2018, they realized that their deep lot might be big enough to accommodate an accessory dwelling unit, or ADU. An ADU refers to an attached or detached unit on the same property as an existing residence, such as an apartment above a garage or a freestanding tiny house.
“When our first child was born and we had 12 family members visit, that increased our motivation to build an ADU,” said Kazenkov, owner of Capital ADU in Washington. “Eventually, we want my parents to live nearby, so ideally they can live in the ADU someday so they’re in our backyard but in a separate home.”
In the meantime, Kazenkov generates about $3,000 per month in rent for the 900-square-foot, two-bedroom, two-level ADU he completed in late 2025.
While laws continue to evolve, 24 states have passed regulations to encourage the construction of ADUs to relieve the housing shortage. In California, which has been a leader in promoting ADUs, about 30 percent of ADUs are used for multigenerational living and 40 percent are rented to people who aren’t family members.
Home buyers looking to increase the affordability of their housing can search for a home with an existing rentable ADU to boost their income and offset their mortgage. If they can’t find one, they should look for a lot that may work to build an ADU and check the local zoning rules before making an offer on the property, said JP Ward, director of business development for Anthony Wilder Design/Build in Cabin John, Maryland. Ward recently worked with clients in Northwest Washington to convert a detached garage on their property into an ADU.
“Zoning and permitting is a big issue for ADUs, with different rules about how close to the property you can build and size requirements in every jurisdiction,” Ward said. “For example, in different locations, the ADU can only be a certain percentage of the lot or a certain percentage of the size of the main house.”
Ward recommended hiring an architect and a civil engineer with experience with the zoning and permitting process to evaluate a property before starting an ADU project.
How to build an ADU
The cost to build a 900-square-foot ADU in the Washington area can range from $230,000 to $250,000, Kazenkov said. He estimated that converting a garage or basement to an ADU can cost $80,000 to $120,000.
Richard Renwick, who works in tech and lives in the Petworth neighborhood of Washington, started plans for an ADU on his property about nine months ago but is still waiting for final approvals to start construction.
“My lot has some elevated areas, so I hired an architect and an engineer to see what I could build,” Renwick said. “I want to keep a parking space, plus add an apartment that I can rent or use for guests when it’s not rented.”
Renwick’s ADU will be a 900-square-foot building on two levels, the largest allowed in D.C., with a garage, half-bath and home office on the lower level and a one-bedroom, one-bathroom apartment upstairs with a washer and dryer. He expects to pay about $200,000 total and has already paid $30,000 in fees to the architect and engineer and for the permitting process. He’s also spending about $25,000 on solar panels so he can rent the unit without charging utilities.
Renwick anticipates charging $1,800 to $2,000 for the ADU unit when it’s ready in three or four months.
“Unfortunately, after we submitted all the paperwork for the permits at the end of 2025, we discovered the measurements for the floor plan were off by one foot,” Renwick said. “We had to redo the plan and change the structure a little and resubmit the plan.”
Home buyers who want a quicker process may want to look for a property with a structure that can be converted to an ADU, Ward said.
“The ADU we recently worked on was a detached garage with a high ceiling, so we were able to keep the existing footprint and create an ADU with a sleeping loft,” Ward said. “We had to add plumbing and electricity, but because this was an existing structure the permitting was a little easier.”
Ward recommended talking to a professional before planning an ADU to understand what’s possible to build given restrictions on the size of the lot and the height of the building. Buyers should not assume they can build a two-bedroom rental unit just because they see a large backyard.
“It’s important to think about how your tenants will access the ADU, such as a pathway along the side of your house,” Ward said. “Even if parking isn’t required, you’ll want to think about where they can park. You may need to do additional paperwork if you plan to rent the ADU to a tenant instead of using it yourself, since that makes you a landlord.”
Building an ADU is similar to building any other house, with inspections required for the insulation, heating and cooling systems, windows, electrical work, plumbing, and fire hazards, he said.
“Think about where the ADU’s water and sewage will come from,” he said. “In the one we built, we had to dig a trench from the main house to the ADU to tap into the water.”
He said building an ADU from design to completion can take eight to 12 months.
“A construction kit can speed things up, but the owners won’t have an option for customization,” he said. “One thing people usually want is for their ADU to blend in architecturally with their main house.”
Should you house-hack with an ADU?
Unlike buying a house with a basement rental unit or a duplex, buying a house and adding an ADU means you’ll need to wait for rental income. In addition, lenders typically only count rental income to qualify for a loan if there’s a history of rent payments from a previous tenant.
“Some banks lend money to build an ADU, but a lot of people fund it with their home equity or savings,” Ward said.
Making the math work can be complex, at least until the ADU is complete. But Kazenkov said if you spend $250,000 and can generate $3,000 per month in rent, you’ll recoup costs in about six years. After that, the rental income becomes profit aside from maintenance expenses. How much you can charge depends on the neighborhood and the size of the unit.
“If you’re building an ADU to rent, it’s usually better to design one with two bedrooms, 1.5 bathrooms, in-unit laundry, off-street parking and a little private outdoor space to get the most rent,” Kazenkov said. “Adding solar panels allows you to cover the utilities for your tenants, too.”
There are some downsides to house hacking with an ADU, Ward said.
“An ADU limits your backyard space and your views from your house,” he said. “You also lose privacy when you have tenants living on your property.”
Kazenkov designed his ADU so that he and his family have a smaller backyard with a fence.
“Our tenants have their own backyard with a fence, so between the two backyards we have a lot of privacy,” he said. “They park in the alley behind the house, so they have their privacy, too.”
Being a landlord comes with responsibilities, too, of course, but Kazenkov has no regrets.
“This has been a great financial decision for us, but there’s also a return on investment from a human standpoint,” he said. “Our tenants wanted to live in Petworth because they have friends there, but the rents for apartments are high. They’re living in a brand-new townhouse with parking and yard for much less than they could find otherwise.”
Sidebar: Local ADU rules
Because ADU regulations can be affected by counties, cities and even homeowner associations, buyers and homeowners or their contractors should start with an online search by address to find the zone for a property and which regulations may impact it. Most locations set a maximum ADU size and height, require the owner to live in the main house or ADU, and restrict the square footage in comparison to the main house and to the lot.
For more ADU information, visit:
- Capital ADU: capital-adu.com
- Arlington County: arlingtonva.us/Government/Programs/Building/Permits/Accessory-Dwelling
- D.C.: dhcd.dc.gov/service/affordable-dwelling-units
- Fairfax County: fairfaxcounty.gov/planning-development/zoning/accessory-living-unit
- Montgomery County: montgomerycountymd.gov/department-housing-community-affairs/information-landlords/licensing-registration/accessory-dwelling-unit-class-3-license
- Prince George’s County: pgccouncil.us/1093/Accessory-Dwelling-Units-Task-Force
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