How To Finance and Build a Mother-in-Law Suite

3 Min Read
Published Feb. 17, 2023
Older couple paints the wall in their new living space.
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Building a mother-in-law suite can create additional living space within the home you already own. A new unit can house relatives or guests — or you could rent it out and generate additional income.

If you want to know how to add a mother-in-law suite, here’s how to get started.

How To Finance a Mother-in-Law Suite

The cost of adding a mother-in-law suite — known legally as an accessory dwelling unit, or ADU — will depend on factors such as the size, location, and whether it’s attached or detached. Whether you’re converting an existing space or building a new structure is also going to make a difference.

How much does it cost to build a mother-in-law suite? According to HomeAdvisor, the cost of building a home addition typically ranges between $22,409 and $81,118, while converting a garage typically costs between $6,008 and $25,433.

Can you build a mother-in-law suite on your property? The answer is usually yes, unless you’re part of a homeowners association that forbids it.

In addition to building costs, you also should plan to apply and pay for the necessary permits, and be ready for increases in your homeowners insurance and property tax bills.

If you need help paying for a mother-in-law suite, here are some ways you can finance the project, if qualified:

  • Tap into your home equity with a cash-out refinance.
  • Take out a home equity loan.
  • Take out a home equity line of credit.
  • Take out a personal loan.

How To Build a Mother-in-Law Suite

Once your financing is in order, it’s time to start building. Here are some key steps to take:

  • Find a contractor. A knowledgeable and experienced contractor can guide you through the process and help obtain any required permits.
  • Choose a plan. You may hire an architect to design a custom mother-in-law suite to meet your needs. You also can work directly with your builder to find a suitable plan online.
  • Prepare the site. Whether the unit is attached or detached, you’ll need to get the site ready for construction. You can save money by doing some of this prep work yourself, especially if you’re preparing a garage or basement for conversion.

How Long Will It Take To Build a Mother-in-Law Suite?

The time it takes to build a mother-in-law suite depends on the size and scope of the project. Converting an existing space can be done in several weeks, while building a brand-new detached structure could take months.

Pros and Cons of a Mother-in-Law Suite

Here’s a look at some of the benefits and drawbacks of deciding to build a mother-in-law suite:

Pros and Cons of a Mother-in-Law Suite

Adds to your home’s value.Costs money to build and maintain.
Can be rented out to generate income.Added financial liability if you rent it out.
Your mother-in-law lives close to you.Your mother-in-law lives close to you.

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