What Is an Accessory Dwelling Unit?

An accessory dwelling unit (ADU) is an independent, self-contained home on the same property as a primary house. It has its own sleeping area, bathroom, kitchen or kitchenette, and a private entrance.

Choose an ADU when you want a second, complete living unit for family or rental income; choose a simple addition when you only need more room.

We are Bentley's Real Estate in Greater Newburyport, Massachusetts, and ADU questions come up with our clients all the time. The first hurdle is usually vocabulary, since one space can go by half a dozen names.

What an ADU is called

Depending on where you live, an ADU might be called:

• In-law unit or in-law apartment
• Granny flat
• Backyard cottage or backyard home
• Casita
• Guest house
• Secondary unit or companion unit

What makes a space an ADU is function, and function also decides its shape. Case in point: a finished basement room with a bed is extra space.

Add a kitchen, bathroom and separate entrance, and it can be a secondary dwelling unit, as long as local rules and a permit recognize it.

The main types of ADUs

That shape falls into five common types of accessory dwelling units, and the right one depends on your lot, budget and need for separation.

Type	What it is	Best fit	Tradeoff
Detached ADU	A separate structure, like a backyard cottage	Larger lots, privacy	Highest construction cost, utility runs, setbacks
Attached ADU	An addition built onto the primary home	Family close by	Shares a wall, changes the home's look
Interior or converted ADU	A converted basement, attic or spare room	Owners using existing space	Ceiling height, egress and fire safety codes
Garage conversion	A garage turned into a living unit	Homes with an underused garage	Lost parking, which some local rules require
Junior ADU (JADU)	A smaller unit, typically under 500 square feet, inside the existing home, which may share a bathroom	A simple family suite	Less independence

Measure the real usable space before sketching a floor plan, because the square feet on paper rarely match what counts as living space.

Once the type is clear, the next question is what the unit is for.

Why homeowners build ADUs

Most homeowners we talk with want one of three things: housing family, earning rental income, or keeping the property flexible. Aging parents, adult children and caregivers all fit.

Rental income can help cover the mortgage and property taxes. And a permitted ADU can add value at resale.

Goal	What to check first
Family housing	Accessibility, one-level living, a separate entrance
Rental income	Whether local rules allow renting, and any occupancy limits
Resale value	Whether the unit is permitted and documented

Picture who will live in the unit ten years from now. A space for an aging parent can later work as a rental, if the design and permits allow it.

Each of those goals comes with a cost.

Pros and cons of an ADU

Weighed side by side, an ADU adds space, income and flexibility, plus cost, permit work and less privacy.

Pros

• Rental income potential from a separate unit
• Housing for family members, close by but independent
• Flexibility in how you use the property
• Possible increase in property value when the unit is permitted

Cons

• Construction, utility and design costs
• Permitting and zoning steps take time
• Less privacy and more activity on the lot
• Property taxes may rise with the assessed value

Before you build, ask a tax professional how an ADU could change your property tax assessment, and ask your lender about financing. Your town is the bigger variable.

Zoning, permits and local rules

Your town or county sets ADU rules. That is, local zoning, building codes and planning department standards decide where a unit is allowed, its size, setbacks, parking and rental use.

Many states have streamlined rules to expand housing, but the local code controls the details.

Rule area	What local codes often regulate
Zoning	Which residential areas allow an ADU
Size	Square feet limits for the unit
Setbacks	How far the structure sits from lot lines
Parking	Whether the property needs an added space
Utilities	Water, sewer or septic capacity
Occupancy	Owner occupancy and rental use

An ADU needs official local building and zoning permits to be legally recognized, and specific requirements vary.

In Massachusetts, rules can differ from one city or town to the next, so contact the local building department or planning office before you design anything. And that permit history stays with the property, which is why it matters long after construction ends.

ADUs when you buy or sell a home in Greater Newburyport

When a home with an ADU goes on the market years later, buyers ask about it. For buyers, an in-law unit can be a real advantage, as long as you ask whether it was built with a permit and how the town classifies it.

For sellers, a permitted ADU gives buyers confidence, while an unpermitted unit raises questions an attorney or lender may need answered.

Bentley's Real Estate is the #1 brokerage in Greater Newburyport by market share seven years running. Our 60+ agents help buyers judge whether a home with an ADU fits their plans, and help sellers present that space honestly.

Weighing an ADU

Weighing an ADU, or a home with one? Call us at (978) 572-1200.