If you don’t know what an ADU is, you are in need of some emergency investment education.
ADUs (accessory dwelling units) are miniature houses the size of a large tool shed that are outfitted as complete residences. They are sometimes converted attics, basements, or garages. But they can also be freestanding.
They are a fast-growing trend across the US, and that makes sense. In an economy with high house prices, rising interest rates, and dollar-damaging inflation, having an extra dwelling on your property that can bring in extra cash each month is nothing but a good idea.
ADUs are also good for municipalities that are looking to increase real estate tax revenues. And they’re a boon to young couples and other new homebuyers that can’t afford $300,000 for a “start-up” home.
When a new business or economic trend benefits every constituent in the market, it’s a pretty safe bet that the trend will accelerate. That’s how I see the emerging ADU industry.
(By the way, I’m not talking about “tiny homes” here, which are very different than ADUs and IMHO a passing trend that I would not invest in.)
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