Phase 3

Budget & Finance

  • Estimate your project budget
  • Understand the types of financing available
  • Know how an ADU might impact your property tax assessment and home value

Your budget is one of the most important parts of your ADU project. You will need to balance design with what you can afford, but also consider potential rental income. Assess your finances early on, after you’ve learned what you can build (Learning the Rules) and before you hire and start working with a design team (Design).


Budgeting is part of the planning phase, which typically takes 1-3 months. Most ADU projects take 12-18 months to complete, but some extend to 24 months or more.

Budget & Finance


Keep in mind: Keep in mind that initial cost estimates are likely to change as you move through the process, and you won’t know what it will truly cost until you talk to a professional. Current workforce and supply chain disruptions are causing prices to fluctuate more quickly than usual. Check with a tax or financial advisor before you begin your project. 

Step 1

Estimate Your Project Cost

If you haven’t already, now is the time to estimate your project costs.

Balancing your design ideas with your budget is one of the most important aspects of your ADU project. A larger or higher-end ADU will likely go for more rent and may result in a larger loan. But if you wish to rent it at an affordable rent, you may need to compromise on size and/or design.

A rough placeholder to use is $260-300 per square foot, including construction and other costs (design, fees, etc.). The actual number can vary and depends on many factors.

Keep in mind that your initial estimate is likely to change and you won’t know the specifics until you talk to your professional team (designer, contractor, etc.).

step 2

Assess Financing Options

Many homeowners use a mix of options to finance their ADU, like their own savings and assets, funds from family, and/or loans. It is strongly recommended that you do not begin construction without your financing plan in place. Be sure to factor in potential rental income since it will be a source for repaying any loans. 

Financing options

See Casita Coalition’s ADU Finance Guide for Homeowners for more details on financing options and our ADU Worksheets for questions to help you decide a financing strategy.


Find answers to the most frequently asked questions about ADU budgeting and financing.

Start planning your project financing

Check out our ADU worksheets


Tell us your thoughts!

Please give us feedback about ADUs in our area. If you leave your contact info, we may be able to get back to you with more information. 

If you’re looking for specific advice or information about your property and ADU, please use the contact information for El Dorado County or the City of Placerville at the bottom of this website. 

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