Building an ADU? Here’s What You Should Know First

Guesthouses still hold the stigma of being for the ultrarich and their friends. This blog post will convince you that’s not the case (if you need convincing) and tell you a few things to consider when building a guesthouse.

Homeowners are building guesthouses as a solution to multi-generational housing, passive income through renting, or just using unused land. As an LA General Contractor, we’ve built guesthouses for various reasons and want to share some things to look out for.

Let’s dive into it.

Guesthouse Vs. ADU

The terms guesthouse and ADU are often used interchangeably. So, is there any difference between a guest house and an ADU?

Yes, a guest house is a living quarter subordinate to the main house, lacking a full kitchen, plumbing, or electrical systems to function independently. An ADU is a self-contained unit built to house family members or tenants with a full kitchen and bathroom, meeting plumbing and electrical standards.

Guesthouses are temporary residences used mainly for sleeping or quick privacy. Lastly, guesthouses must be a separate structure from home, while ADUs can be attached to the house like a garage conversion.

Learn The Local Laws

Before drawing blueprints, we make sure we’re up to date on the rapidly changing Los Angeles guidelines for guesthouses and ADUs. You will need to apply for permits, which is easier in areas with a housing crisis. Some communities want to prevent neighborhoods from turning into blocks of hotels, so they have a tight grip on zoning laws.

Zoning laws include:

  • The guesthouse’s maximum square footage.
  • The distance between the guest house and the main house
  • Necessary permits for construction
  • The maximum number of days a guest house can be used as a short-term rental.

Keep in mind that your HOA can still disapprove of your guest house design, rental type, and terms even if zoning permits it.

Determine The Use Of The Guesthouse

Guesthouses are usually within the 500-600 square foot range or as big as local laws will allow. Use this knowledge and your personal preference to determine who will stay in the guest house and how long. If an elderly family member may live there, consider adding accessibility features. If you live near a college campus, consider low-voltage wiring and extra outlets. If a family will stay there, maybe it makes sense for it to open up to a living room so the family can visit.


Expect to pay $100-$200 per square foot for a guesthouse. So, if you want a 500 sq. ft. guest house, that will cost between $50,000 – $100,000. The highest costs outside of labor and materials are permits and design fees.

Many loans are available if you don’t have the cash available, like construction loans, cash-out refinances, and HELOCs.