Interactive Tool
ADU Rental ROI Calculator
Run the math on renting out your ADU. Enter build cost, financing, and rent assumptions to see monthly cash flow, cap rate, breakeven point, and 5/10/30-year ROI projections.
Your assumptions
Construction, permits, design, utility hookups.
= $45,000 of build cost
HELOC ~7.5-9%, construction ~8-11%, ADU loan ~6.5-9%.
Auto-set from your metro. Override with comp data from Zillow/Apartments.com.
National avg ~6.4% (NAA 2025). ADUs often run lower (3-5%) due to demand.
10% if self-managing; 15-20% if hiring a property manager.
ADUs are typically reassessed only on the new value (CA Prop 13).
Most carriers add a landlord/dwelling rider rather than a new policy.
Verdict
Strong rental investment
This ADU pencils out with healthy cash flow and a cap rate above the 5% threshold most ADU investors target. Worth pursuing.
Monthly cash flow
$485
Cap rate
9.30%
Cash-on-cash return
12.9%
Breakeven
7y 9m
Monthly breakdown
- Gross rent
- $2,350
- Vacancy loss (6%)
- -$141
- Effective rent
- $2,209
- Property taxes
- -$135
- Insurance
- -$95
- Maintenance (10%)
- -$235
- NOI (before debt service)
- $1,744
- Mortgage P&I
- -$1,259
- Net cash flow
- $485
Long-horizon ROI on cash invested
Assumes 3% rent growth, 4% appreciation, no refinance
- 5-year ROI
- 189%
- 5-year total return
- $85,195
- 10-year ROI
- 447%
- 10-year total return
- $200,981
- 30-year ROI
- 2435%
- 30-year total return
- $1,095,840
Related Reading
Best ADU Financing Options for 2026
HELOC vs construction loan vs ADU-specific lender — full comparison.
ADU Rental Income: Tax Guide
Schedule E vs short-term rental rules, depreciation, and the QBI deduction.
Short-Term vs Long-Term ADU Rental
Airbnb arbitrage vs traditional lease — which actually makes more after costs.