When you were little, you probably had a playhouse or fort in the backyard where you could escape. This hideaway symbolized a world away from everyday life, a secret place where you could imagine anything. If your friends were trustworthy, you might have shared it with them.

 There’s an adult replacement for this childhood escape, and it’s called an accessory dwelling unit, or ADU. ADU's are designed to meet specific needs. For example, these buildings can be home offices, granny flats, home gyms, and even rental units.

Regulations concerning these accessory units vary by state and municipality. Before you get excited about adding value to your property with an ADU, it’s essential to crunch the numbers and talk with experts to understand every aspect of the project.

Although ADUs are small, building one can be as complex and expensive as constructing your primary home. Local regulations may restrict what you can do and make it challenging to reach your goals.

Still interested? Here are five things you need to know before you start building an ADU.

1.   Have a Reason

Every decision you make about building an ADU should stem from how you intend to use the space. Before you start looking at designs and talking to contractors, take some time to think through how an ADU would change your life.

For example, many remote workers would love to have a home office on their property. Artists may want a space to create and store their work, and small business owners can benefit from setting up shop in their own yard.

If you want proximity to – but privacy from – family members, an ADU may be the perfect solution. These structures are sometimes called “granny flats” because many families build them for relatives . Other property owners see ADUs as an opportunity for revenue and construct them as rentals.

Based on your goals, the cost and legal requirements for building an ADU will vary. For example, a home office may not need plumbing – but a rental definitely will. When you know the value an ADU will bring, you can invest the right amount of money and time into it.

2.   Start With Local Laws

After you’ve decided why you’re building, the next step is to do thorough research on building regulations in your area. Unfortunately, there’s no single website or source that can untangle the legal requirements for building an ADU. That’s because every state and every city has different requirements and they’re changing all the time.

Zoning laws and restrictions on ADUs were originally intended to reduce illegal rentals. This protected unsuspecting renters and kept buildings safe. Unfortunately, regulations also made it challenging for some residents to construct accessory units at all.

Thankfully, many cities have changed their regulations over the last several years to allow ADUs. Before you invest in an ADU, you need to investigate your local requirements . You can start by contacting your local representative who specializes in zoning and ADUs.

Connecting with this person is essential for your success. They can educate you on permits, building codes, and local regulations so your ADU is built legally and you won’t face fines after construction. However, it’s important to always remember that the ultimate responsibility to understand and follow the law falls on you.

3.   Find Reliable Experts

Once you’ve connected with local authorities, it’s time to build the rest of your team. Ideally, you should hire a local ADU specialist who can help you find the ideal solution for your goals in your area. These specialists steep themselves in local laws and have experience helping many different clients.

Depending on the project, you may also want to talk to an architect. In order to construct more complex ADUs, like rentals, working with an architect may be a legal requirement. If you’re concerned about the legal aspect of building an ADU, you can also contact a lawyer. Because cost is a huge part of planning, you can also consider talking to a financial advisor.

Once you’ve completed the initial prep stages, it’s time to talk to contractors. You should speak with several so that you can compare quotes and services. An experienced, trustworthy contractor should be able to give you references and agree to put everything in writing so it’s legally binding.

If you choose to work with an ADU company, you may still want to hire specialists to oversee the things you care about most. Some companies that specialize in ADUs have a set of contractors on staff, while others serve as a liaison between you and various specialists.

Once you’ve talked to various specialists, you should have enough information to start planning the best physical structure for an ADU that meets your goals. You want to follow legal requirements, stay within your budget, and create a functional space that exceeds your expectations.

This phase consists of using your imagination in combination with hard-and-fast rules. For example, zoning laws and building codes give you parameters that can help you plan for an efficient and cost-effective space. Once you know these boundaries, you’re equipped to find the best solution for you.

For example, you probably don’t need a bathroom or running water in a home office. Depending on the building laws in your area, you may be able to save significantly by scaling this space down and reducing utilities. A smaller building means a smaller foundation, fewer materials, and different regulations.

Talking with experts can help you determine the best way to reach your goals. It’s important to be flexible during this stage. To build an affordable and legal ADU on your property, you may need to let go of any preconceived vision of what it will look like. There are many creative ways to reach your goals without copying what other people have done.

5.   Count the Cost

Although ADUs are small, they can become costly very quickly. In Oregon, the cost of building an ADU can range between $40,000 and $90,000 . Depending on where you live, the cost may be more or less expensive. Initial expenses include hiring contractors and specialists and paying for building permits.

During construction, you’ll need to finance building materials and pay all your workers. While it may be tempting to cut corners, this usually leads to more expenses down the road. For instance, choosing an inexpensive foundation could lead to disaster later if it’s unable to support the finished structure.

Investing in quality materials and experienced workers will pay off over the long run. Of course, if adding an ADU to your property increases its value, it will also increase your property taxes. There may be additional taxes or paperwork associated with a rental or home business. Your ADU will also require upkeep and repairs over time.

It can be easy to become emotionally attached to the idea of an ADU and think you’ll worry about the cost later. However, the best plan of action is to rely on hard numbers and calculate everything thoroughly before you begin. That way, you’re free to enjoy the process with a much lower risk of failure.

Is an ADU Right for You?

Accessory dwelling units can increase your available living space, provide a home for elderly family members, and bring you revenue through renting. They can add value to your life by increasing your opportunities and raising the worth of your property.

However, there are legal and financial restrictions to consider before you plunge into this project. In most cases, shortcuts to completing these projects will lead to problems later – ranging from building fines to structural collapse.

Before you start building, it’s essential that you investigate local laws about ADUs and speak with experts. Most of the time and effort spent on your ADU should happen during the planning phase rather than the building phase.

Once you understand these requirements and boundaries, you’ll be able to construct an ADU that fits your budget and achieves your goals. The best way to streamline this entire process is to keep your personal reason for building an ADU in the forefront of your mind – it will guide you every step of the way.