All you need to know about Secondary Dwelling Units (SDUs)

Secondary Dwelling Units

Accessory Dwelling Units (ADUs), also sometimes called Secondary dwelling units, are becoming very popular.

These are a good choice if you have some extra space and want to convert it into a residential space that can also be a source of passive income. Let’s explore more about them.

What is a Secondary Dwelling Unit?

How does it differ from a primary dwelling unit?

A Secondary Dwelling Unit, also known as a granny flat or a second unit, or an in-law unit, works as an independent residential area equipped with all the amenities. It can be.

Detached or Attached:

You can have SDUs which are not connected or connected to the main house.

Existing Space Repurposed:

A portion of the primary residence (for example, the master bedroom) is transformed into a separate dwelling unit.

Junior Accessory Dwelling Units:

As evident from the name, these are good for a small family. They are 500 square feet in size.

How might a second dwelling generate more income?

The revenue opportunity is one of the most tempting aspects of a secondary dwelling. Some people construct an SDU to rent it out to others, while others consider constructing an SDU for themselves and then renting out their main house as a method to downsize and offer a constant source of income.

Long-term or short-term vacationers, homeowners who rent out their SDU add an income stream to cover some or all of their housing costs.

Finding a technique to lower or eliminate their housing bills by having someone else pay them is known as house hacking.

The Advantages of Having a Second dwelling Unit

These are cost-effective home to build because they don’t require any new infrastructure or land.

Existing lots are used to build second living units, which helps control urban sprawl and conserve open space.

Homeowners can build a second dwelling on their property or convert a garage into a junior dwelling unit. They can rent it out and generate monthly rental income.

You can create a separate living space for your guests or other family members. This is especially beneficial for extended families. You can stay with them without compromising your privacy.

Disadvantages of secondary dwelling units

Depending on the type of SDU, its amenities, location, and other considerations, an ADU could result in a significant increase in the assessed value of your home.

As a result, it could result in a considerable rise in your property taxes, perhaps increasing your annual property tax bill by three to four figures.

Like any building construction and zoning rules, permitting regulations and processes can be exceedingly intricate and time-consuming, making the construction process long.

SDUs will set you back upwards of $40,000 in the first year. A detached ADU, which can cost more than $100,000 to build and outfit, raises the price dramatically.

Covenants and selling limitations may be in place – Because there are different zoning laws for ADUs, it can get a little confusing when selling a house. Some governments, for example, require that the owner occupy ADU-equipped properties.

It means greater square footage, which means more upkeep and maintenance expenditures for the ancillary structures. After all, it’s your responsibility to keep it in good working order.

Because SDUs are secluded, they are easy targets for damage. For added protection, you might install motion-activated floodlights or exterior cameras as a solution.


The emergence of tiny secondary dwellings unit is another widespread trend in the affordable housing market.

Tiny houses are also becoming more popular as a solution to the housing affordability challenge.

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For a more accurate estimate of how much an SDU in your neighborhood or on your property would cost, contact a local real estate agent or contractor.