Many people are starting to see the value in having a space within their homes to rent out or use to house another family member or friend. However, the costs for a room addition will vary widely based on how much complexity is involved and the existing structure of your home. That being said, you’re likely to derive value from a room addition in multiple ways. You can of course enjoy hosting friends and family for free, which is priceless and a positive addition.
You can rent the space either long-term or on short-term rental sites, recouping some of the costs. Also, many people see these additional dwelling units (ADUs) as a major boon if they are shopping to buy a home, helping you to sell your home quickly some day.
One of the most economical options if you have the space and the home structure for it is to simply add a separate bathroom and a lockable door to create an in-law suite. If this space is separate from the rest of the house, even if the renters must pass through common area to reach it, many people will find it to be essentially a separate apartment.
This goes doubly if it has an exterior entrance, such as a finished basement or an attic apartment with an outdoor staircase. Bathrooms vary widely in cost, of course, and a simple one can cost $5000 or even less if the plumbing is already well-suited to it. However, if you need to move walls, choose high-end materials, or need to build off the house’s current structure to add new square footage, the cost can quickly rise as high as $35,000.
One area that many people see as a good starting place for an ADU is their garage. If you’ve let your garage succumb to being storage space instead of even housing cars, it can make sense to clear it out and use those existing walls as the basis for a new bedroom and bathroom. Garages, even the space above the garage, can be roomy and comfortable, allowing space for amenities like a kitchenette and small seating area that make a space more attractive to renters. Depending on the complexity, expect such a project to set you back between $5,000 and $25,000.
While a guest house is often smaller and simpler than a typical standard home, you are still essentially asking how much it costs to build a whole house when you aim for a guest house. Because some costs can be recouped by opting for a modular guest house, one with some prefabricated elements that require less on-site construction time, you can often install a guest house for between $45,000 and $100,000, no small amount but less than is typical for a full-sized home. If your goal is to rent it out, having the completely separate structure is likely to appeal to your guests, which could result in a higher potential rental rate.