Free · California · Live estimate
What could your
backyard earn?
A backyard ADU isn't a remodel — it's a small real estate investment. Enter your rent, build cost, and financing on the right and watch your monthly cash flow and cash-on-cash return update live.
Free · No obligation · Talk to a real ADU specialist
- Typical CA rent
-
$2–4K
Monthly rent range
- Layers of ROI
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4
Layers of return
- Cost to use
-
$0
To use this
Standard amortization math · California-realistic defaults · No signup
Live estimate
Your ADU's numbers
Cash invested: $40,000
Net monthly cash flow
$0
- Monthly loan payment
- $0
- Rent covers
- 0%
- Cash-on-cash return / yr
- 0%
Free · No obligation · California ADU planners
Estimates for planning only — actual rent, cost, and financing vary. For a grounded projection for your address, book a free consultation.
The mindset shift
A remodel spends money. An ADU makes it.
A kitchen remodel costs money and gives you a nicer kitchen. That's the whole return — a lifestyle upgrade you pay for.
A well-financed, income-producing ADU is a different animal. It gives you cash flow, a more valuable property, family flexibility, and long-term income — a small real estate investment in your own backyard, funded largely by a tenant or by the money you'd otherwise spend housing the people you love.
That's why the return doesn't fit in a single number. It comes in four layers.
The full picture
The 4 layers of ADU ROI.
The calculator above measures layer one. The other three are where the real wealth quietly compounds.
01
Monthly rental income
A well-designed ADU commands real rent — in most of California, enough to offset your loan payment and often cover it entirely. That's a tenant helping you pay down an asset you own.
02
Property appreciation
You're adding permitted, income-producing square footage to your lot. Your net worth grows the day the ADU is finished — years before you ever think about selling.
03
The invisible ROI
Housing a parent instead of paying for assisted living. Giving an adult kid a launchpad. A real home office. Aging in place. These never show up on a rent roll — but the money you don't spend is real return.
04
Retirement income
Once the loan is paid off, the rent is largely profit. It becomes a small pension attached to your house — durable, inflation-resistant income for the years when you want it most.
What the calculator does
Reading your result.
Net cash flow
Rent minus payment.
Green means the rent more than covers your financed payment — the ADU pays for itself and hands you a surplus. In the red means a manageable monthly gap while you still build equity and appreciation underneath it.
Rent covers
The coverage %.
How much of the loan payment your rent absorbs. At 100%, a tenant is paying your entire mortgage on the ADU. Even 70–90% dramatically changes the math on whether you can afford to build.
Cash-on-cash
Your true yield.
Annual net cash flow divided by the cash you actually invested. Because you finance most of the build, a modest surplus can translate into a double-digit return on your own money — before appreciation even counts.
Loan payment uses standard amortization:
M = P·r·(1+r)ⁿ / ((1+r)ⁿ − 1),
where r is the monthly rate and n is the number of payments.
Keep going
Now pin down the two inputs that matter most.
Your return is only as real as your build cost and your financing. These two free tools sharpen both.
Questions
ADU ROI questions we hear often.
Still have a question? Ask us during your free consultation.
How much rent can an ADU actually earn in California?
It depends on size, location, and finish, but in most California metros a permitted 1-bed ADU rents for roughly $1,900–$3,200/mo, and a 2-bed detached unit in a strong-rent submarket can clear $3,000–$4,000/mo. The calculator above defaults to $2,400 — a realistic middle for a quality 1-bed. For a grounded number tied to your actual street, a free consultation gets you comparable rents nearby.
What is cash-on-cash return, and why does it matter more than the headline rent?
Cash-on-cash return measures the annual net cash flow (rent minus loan payment) against the actual cash you put in — not the total project cost. If you finance most of the build, your invested cash is small, so even modest net cash flow can produce a strong percentage return. It's the number real estate investors use because it reflects what your own money is earning, not the bank's.
Is an ADU a better investment than remodeling my kitchen?
They're not the same category. A kitchen remodel costs money and gives you a nicer kitchen — a lifestyle expense. A well-financed, income-producing ADU gives you monthly cash flow, a more valuable property, family flexibility, and long-term income. One is a purchase; the other is a small real estate investment in your own backyard.
What if the rent doesn't fully cover my loan payment?
That's common in the early years, especially at higher interest rates or with a smaller down payment — and it's not necessarily a bad deal. A partial shortfall (say, $300/mo) is often far less than what you'd pay to house the same family member elsewhere, and you're still building equity and appreciation the whole time. As rents rise and the balance drops, most projects swing cash-flow positive. The calculator shows exactly where you stand.
How accurate is this calculator?
The loan payment uses standard amortization math, so that figure is precise for the numbers you enter. The rent, build cost, and financing terms are your inputs — the output is only as realistic as they are. Treat it as a fast, honest planning sketch, not a lender quote or an appraisal. For a projection grounded in your address — likely rent, real build cost, and net ROI — book a free consultation.
Stop guessing on the numbers
Get a grounded projection for your address.
A free consultation turns these defaults into real numbers for your property — likely rent from comparable units nearby, an honest build cost for your lot, and your true net ROI. No obligation.
