How to Build an Affordable Backyard ADU

Creating a backyard Accessory Dwelling Unit (ADU) can be a smart investment and a fantastic way to utilize your property more effectively. Think about it: mortgage rates are as concerning as ever, and there is an ever-increasing demand for housing space. Therefore, if there is a creative way to utilize your existing property for housing and financial reasons, it makes sense to consider it. Here’s how you can develop an affordable backyard ADU to make the most of your dwelling space.

What is a Backyard ADU?

Imagine transforming your unused backyard space into a charming and functional living area. Perhaps you’ve always wanted a cozy spot for guests or dreamed of a rental space that could generate extra income. With careful planning and thoughtful design, that vision can become a reality, providing both financial benefits and personal satisfaction.

backyard ADU

Most of my clients often ask me if a backyard ADU would be a worthwhile investment. I walk them through the potential benefits by first explaining what it is.

A backyard ADU is a secondary housing unit situated on the same grounds as your primary residence but separate from the main house. Commonly known as granny flats, garden cottages, or in-law units, these structures provide independent living facilities such as a kitchen, bathroom, and sleeping area.

Benefits of Building a Backyard ADU

  • Additional Income: Rent out the ADU for extra cash flow.
  • Increased Property Value: Enhances the overall market value of your property.
  • Flexible Use: Can serve as a home office, guest house, or living space for family members.
  • Sustainability: Smaller living spaces are often more energy-efficient.

Privacy Factors to Consider

Privacy is a crucial aspect to address when designing your backyard ADU.

Both the occupants of the ADU and those in the main house value their privacy. Therefore, how you plan the layout, features, and positioning of the ADU can significantly impact the living experience for everyone involved!

backyard ADU

Strategic Placement of Windows: Carefully consider where windows are placed in the ADU. Position windows to capture natural light while minimizing direct sightlines into private areas of both the ADU and the main house. For example, using higher, clerestory windows can allow light in while preserving privacy from neighbors and the main residence.

Orientation of the Unit: The direction your ADU faces plays a pivotal role in privacy. Orienting entrance doors and main living areas away from the main house can provide a more private experience for both parties. This can involve positioning the ADU’s entrance on the side of the unit facing away from the main house or using existing structures like garages as buffers to increase seclusion.

Thoughtful Landscaping: Landscaping is not only aesthetically pleasing but also a practical tool for enhancing privacy. Tall shrubs, privacy fences, and trellises with climbing plants can create natural barriers that shield the ADU and its outdoor spaces from view. Consider planting fast-growing evergreens that provide year-round privacy or installing vertical gardens if space is limited.

Funding a Backyard ADU

Here’s how you can fund your ADU project:

Financing Options:

Exploring various financing avenues can provide the necessary funds to bring your ADU project to life:

  • Loans: Many financial institutions offer personal loans or construction loans specifically designed for home improvements or expansions like ADUs. These can provide the lump sum needed upfront.
  • Home Equity Lines of Credit (HELOC): If you have equity in your property, a HELOC can be a flexible way to finance your ADU. It allows you to borrow against the equity in your home at a lower interest rate than many personal loans.
  • Special Programs: Some local governments and housing authorities offer grants, subsidies, or low-interest loan programs specifically for ADU construction to encourage affordable housing solutions. These programs often have specific requirements but can significantly reduce financial strain.

Phased Building:

Constructing your ADU in phases can spread the financial burden over a more extended period, making it more manageable:

  • Phase 1: Focus on getting the structure weather-tight — foundation, walls, roof, and windows.
  • Phase 2: Implement internal fittings and fixtures — plumbing, electricity, and insulation.
  • Phase 3: Finish the interior — drywall, paint, flooring, and cabinetry. This approach not only spreads out your spending but also allows you to pause construction if funds become tight without compromising the structure’s integrity.

Cost-effective Materials:

Selecting the right materials can greatly reduce your expenses without sacrificing the quality of your ADU:

  • Prefabricated Units: These are manufactured off-site and delivered ready to install, which can significantly reduce labor costs and construction time.
  • Recycled Materials: Using reclaimed wood, recycled insulation, or second-hand fixtures can lower costs and add character to your ADU.
  • Sustainable Choices: Materials like bamboo for flooring or SIPs (Structural Insulated Panels) for walls are not only environmentally friendly but can also be cost-effective due to their durability and energy efficiency.


A backyard ADU can be a worthwhile addition to your property, offering flexibility, additional income, and increased property value. With the right planning and creative financial strategies, you can build an affordable and charming ADU in your backyard.

Opting for GoldenADU for your backyard ADU project means choosing a team with extensive experience, custom solutions, and impeccable craftsmanship.

GoldenADU excels in creating diverse types of ADUs, from backyard cottages to front-yard units and eco-friendly, solar-powered structures, each designed to meet your unique needs while adhering to local regulations. Our dedication to delivering customer satisfaction and providing seamless project management from start to finish ensures your ADU development is a stress-free and rewarding experience.

Contact us today at 213-693-2405 to get your free ADU consultation!


What are the zoning requirements for a backyard ADU?

Check with your local city or county planning office, as zoning regulations vary.

How long does it take to build a backyard ADU?

Construction time can range from a few months to over a year, depending on the complexity and permitting process.

Can I build a backyard ADU on a small property?

Yes, many areas have specific provisions for ADUs even on smaller lots, but always verify local regulations.

What is the best way to ensure privacy in a backyard ADU?

Consider the placement of the unit, landscape design, and the orientation of windows and doors.

Building a backyard ADU requires thoughtful planning, but with these tips and considerations, you can create a functional and affordable addition to your home.

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