How Much Value Does a Mother-in-Law Suite Add to Your Home?

Are you considering adding a mother-in-law suite to your home and wondering how much value it will add to your property?

When it comes to how much a mother-in-law suite is worth, you must consider how the space is permitted, how much square space you’re adding to the property, what comparable properties are valued, and the demand for homes with these spaces.

Furthermore, if you’re considering the addition for personal use, think about the value it will add to your family and lifestyle. This article breaks down how much value an in-law suite adds and what property owners need to consider before breaking ground.

What Is a Mother-in-Law Suite?

A mother-in-law suite, also known as an in-law suite or granny flat, is a private living area within a house or on the property that allows for independent living while still being close to family members.

These suites are designed to accommodate guests, aging parents, or other family members, offering them privacy and convenience.

Mother-in-law suites are typically equipped with the features of a small apartment, such as:

• Bedroom and living room (sometimes these are the same large room and similar to a studio apartment).
• Full kitchen or kitchenette.
• Bathroom

Mother-in-law suites often, but not always, have separate entrances to enhance privacy and independence for the occupants. This separate entrance allows the residents to come and go without disturbing the main household.

However, in some cases, the suite may be integrated into the home’s layout with shared entrances.

Difference Between an In-Law Suite and Accessory Dwelling Unit (ADU)

When considering adding supplementary living space to a property, homeowners often get confused between the options of an in-law suite and an accessory dwelling unit (ADU). While both serve the purpose of providing additional living quarters, their differences, particularly in terms of permitting and usage, are significant.

The primary distinction between an in-law suite and an ADU lies in the permitting process. ADUs require specific permits that ensure they meet the local zoning and building codes, making them legally distinct entities from the main residence.

These permits confirm that the ADU adheres to safety, health, and construction standards necessary for habitation. Obtaining the appropriate permit not only validates the structural integrity and safety of the unit but also legally sanctions it to generate rental income.

ADUs require a separate entrance and are often detached from the main home. This physical separation underscores their independent functionality and utility as standalone units. In contrast, in-law suites are usually integrated into the primary residence and may not have their own entrance.

Legally, ADUs are recognized as separate rental units built by property owners to generate rental income. This is a significant aspect of ADUs as it allows homeowners to leverage their property for financial gain, commonly called house hacking.

Lastly, when it comes to property valuation, an ADU’s square footage is not included in the total square footage of the main house. This separation in valuation is because ADUs are considered independent units, unlike granny flats or in-law suites, which are integrated into the single-family home and contribute to its overall square footage.

According to Porch.com, when ADUs are located on properties in major cities with high housing costs, an ADU can add as much as 35% to the value of a property.

Does a Mother-in-law Suite Add Value?

Like any addition or renovation, the specifics of the property, location, and work completed greatly impact the amount of value added to the home. 

An Addition vs Repurpose of Existing Liveable Space

Adding liveable square footage to a home will almost always add value, especially if the property is smaller. In most situations, the smaller the home, the more value is added when you extend.

To add square feet to a house, you don’t necessarily need to pour a foundation or extend your roof line. Many properties have existing spaces that can be finished to create permitted living space.

For example, an unfinished basement represents an excellent opportunity to create a mother-in-law suite conversion. Alternatively, you could finish an attic or an existing detached structure.

However, if you are converting existing space into an in-law suite, you might not get as much bang for your buck. For example, converting an extra living room, game room, or other space into a mother-in-law suite might add some value, but the loss of the previous feature also needs to be considered.

Fortunately, space conversion renovations are also the most affordable option, with reasonable expenses as reasonable as $10,000.

Location

There’s a saying in real estate that you should never over-upgrade your home. You don’t want your home to be the biggest in your neighborhood, and you don’t want it to have the highest quality features. Over-upgrading can cause the renovations you undertake not to have the desired payoff.

The same goes for adding mother-in-law suites to homes in areas where homes typically don’t have them.

While having a unique feature might make it more sought-after and increase its market value, it can make it difficult to value if there are no comparable sales in the area.

Buyer Demand

The biggest question you need to ask when considering adding a mother-in-law suite to add value to your home is, “Are buyers looking for an in-law suite.”

The best person to answer this question is a local real estate agent. An experienced agent understands the market, talks to buyers daily, and knows what property features they are searching for.

Connect with a local real estate agent with FastExpert. FastExpert helps you compare agents, read reviews, and view track records so that you can find an agent who understands your market.

What is the ROI of Mother-in-Law Suites?

If you’re looking for the biggest return on investment (ROI) on a home renovation project, a mother-in-law suite could be a winner or a flop. The more money you spend on renovations and remodeling to create the in-law suite, the lower your ROI will be.

Converting existing spaces or adding square footage is usually the best way to get a good return on construction costs.

Benefits of a Mother-in-Law Suite Beyond Value Increase

A mother-in-law suite adds value to a home monetarily, but it also creates a useful separate living space.

Many homeowners add an in-law suite because they know that the space will be valuable to their family structure or even just for housing guests. Having a complete suite with a separate bathroom, living space, and possibly a kitchenette can make having guests stay for extended periods more comfortable.

However, beyond just a space for guests, a mother-in-law suite can benefit homeowners and serve other purposes.

Multigenerational Households

Aging parents can live close to their adult children and grandchildren, facilitating family support, all while still having some independent space.

Alternatively, it can be a great space for other family members, such as those with disabilities, those facing financial hardship, or adult children who have yet to leave the nest.

Cost-Effective Senior Housing

The average cost of senior living facilities can range from $3,000-8,000 per month, depending on the area. Mother-in-law suites can be a cost-effective alternative to senior housing, allowing aging parents access to additional support while maintaining a someone separate dwelling.

For many, the cost savings, compared to senior living facilities, can more than justify the cost of building an in-law suite.

Accessibility Features

Suites can be designed or modified to include accessibility features such as wider doorways, walk-in showers, and grab bars, accommodating the needs of elderly or disabled occupants without the need to modify the main residence.

Privacy and Independence

While allowing families to live together, a mother-in-law suite often has a separate entrance, bathroom, kitchenette, and living areas. It offers privacy and independence for both the occupants of the suite and the main house.

Rental Income Potential

Homeowners can rent out the suite to housemate tenants, providing an additional source of income while not being a legal rental property.

This can be especially appealing in areas with high rental demand, helping homeowners offset mortgage costs or fund maintenance and upgrades for their property.

Flexible Space

The suite can serve various purposes over time, such as accommodating guests, housing a live-in nanny or caretaker, or providing a home office, gym, or studio space.

This adaptability makes it a versatile addition to any home.

Considerations Before Adding a Mother-in-Law Suite

Mother-in-law suites can be beneficial, versatile spaces that add value to your property. But before you dive into construction, there are some elements you need to consider.

Zoning and Legal Requirements

You must check with your local zoning office to find out what is required to make the granny flat a legal space. Even interior conversions usually require a permit, especially if you add plumbing or electrical.

Zoning laws vary significantly by location and can impact the suite’s allowable size, location, and features. Decide whether adding a mother-in-law suite or getting full permits for an ADU is more beneficial.

An ADU can serve as both a mother-in-law suite and increase resale value by being a legally rentable income property. Therefore, even if you don’t intend to generate monthly income from the granny flat, getting the necessary permits could be a good investment and beneficial to your housing market.

Construction and Renovation Costs

How you build a mother-in-law suite will greatly impact how much you spend. It’s essential that you decide on a budget and work within those parameters. Building costs can be either affordable or well over $100,000.

Renovating an existing space in your main dwelling is usually the most cost-effective way to build an in-law suite. If a basement is already finished and has a bathroom, the renovation costs could be as simple as adding a wall and kitchenette. With these types of renovations, homeowners have kept their construction costs down to as little as $10,000.

However, if you are undertaking new construction, whether that’s finishing a basement or attic, or building an extension or separate structure, then expect it to cost much more. The cost of construction will depend on where you live and how much work you are undertaking.

Key cost factors include:

• Construction Type: Building a detached suite or converting existing space affects the total cost. New constructions are generally more expensive due to the need for new foundations, roofing, and exterior walls.
• Materials and Finishes: The quality of materials and finishes chosen for the suite. High-end finishes and fixtures will increase the overall expense.
• Plumbing and Electrical Work: Installing new plumbing and electrical systems, especially if the suite is detached from the main house and requires an electric meter, can be costly. These installations must comply with local building codes and require professional contractors.
• Permits and Legal Fees: Building permits and potential legal fees for ensuring compliance with local zoning and building codes can add to the total expense.
• Labor Costs: Labor costs vary by location and can be a significant portion of your construction budget.

Should You Get a Prefab ADU?

For some, an affordable solution is a prefab ADU or a small manufactured home. If your city permit office allows this type of construction, it can be an easy and inexpensive way to add a detached in-law suite.

Prefab ADUs are manufactured off-site and delivered ready to install, significantly reducing construction time compared to traditional, site-built units. These units are built in a factory setting, allowing for better quality control and standardization in materials and building practices.

Therefore, you might actually have a better-quality structure than one built by a local contractor. Since most of the construction is done off-site, there is less disruption to the homeowner’s property and daily life during installation.

There are hundreds of design and size options available so owners can find a style that matches their existing house. However, while some prefab models offer customization options, they may be more limited in design and layout than a custom-built ADU.

Ensure the prefab unit complies with local zoning laws and building codes, which may affect the size, design, and placement of the ADU. Prefab ADUs can be a great alternative to traditional mother-in-law suites.

Is a Mother-in-Law Suite Worth It?

A mother-in-law suite represents a significant value addition to any property, offering both functional living space and financial benefits. Marketed effectively, it can be a key selling point, attracting specific buyer demographics who value its flexibility and potential income.

Many real estate markets have a growing demand for homes with additional, independent living spaces, making mother-in-law suites increasingly popular and valuable.

To make an informed decision and understand the potential impact on your property’s value, consider getting a professional opinion from a real estate agent. 

FastExpert offers a platform to compare agents, read reviews, and view track records, helping you find the right agent who understands the nuances of your market and can guide you in deciding if adding a mother-in-law suite is the right investment for your property.