What Is an ADU?
What Is an ADU?
If you’ve been exploring ways to maximize your property’s potential, you’ve likely come across the term Accessory Dwelling Unit (ADU).
But what is an ADU, exactly? An ADU is a secondary residential unit located on the same property as a primary home. This separate unit can be detached, attached, or converted from an existing space like a garage or basement. Unlike tiny homes, which can sometimes be mobile, ADUs are permanent structures that meet local zoning and building codes.
With the rising demand for affordable housing and flexible living spaces, ADUs have become a popular solution for homeowners looking to generate rental income by leasing out the unit or boost their property value with an additional living space. But they’re also a space to accommodate multigenerational living for family members, where grandparents can stay close, kids can come back home, or friends can visit without feeling cramped.
But how does an ADU compare to a tiny house? In this guide, we’ll break down what defines an ADU, how it differs from a tiny home, and how to get started if you’re considering adding one to your property.
An ADU is a self-contained residential unit located on the same lot as a primary home. It has its own entrance, kitchen, bathroom, and living space, making it a fully functional home within a property.
ADUs go by many names, including:
Unlike tiny homes, which can be mobile or standalone structures, ADUs must be permanently attached to a property and comply with local zoning laws.
ADUs come in various forms, allowing homeowners to choose an option that best suits their property:
An ADU adds extra space and can be a smart investment that brings both financial and lifestyle advantages. One of the biggest draws for homeowners is the ability to generate passive income. With the growing demand for rental housing, an ADU can provide a steady revenue stream, whether you have long-term tenants or a short-term vacation rental.
Beyond financial benefits, ADUs are a practical solution for multigenerational living. Many families use them to house aging parents who want to remain close but still maintain independence. Others find ADUs ideal for adult children who need an affordable place to live while saving for their own home.
Homeowners also see a property value boost when adding an ADU. These units make homes more versatile and appealing to buyers, especially in competitive real estate markets. In addition to financial gains, ADUs contribute to sustainability efforts by maximizing existing land use and reducing urban sprawl. Cities across the country are recognizing their potential and relaxing zoning restrictions to encourage more ADU development.
An ADU is a flexible and future-proof housing solution for anyone looking to create a rental opportunity, a private space for family, or increase their property’s worth.
Accessory Dwelling Units (ADUs) and tiny homes might seem like the same thing. They both emphasize efficient, small-footprint living, but they differ legally, structurally, and functionally.
ADUs are permanent residential structures that must comply with local zoning laws, building codes, and permitting requirements. They’re legally considered accessories to a primary residence, meaning they cannot be sold separately from the main home.
Tiny homes, on the other hand, can be either on wheels (THOWs) or built on a foundation. If a tiny home is on wheels, it’s typically classified as an RV or mobile home, not a legal residential structure. This distinction can make financing and insuring a tiny home much more difficult than an ADU.
In terms of size, ADUs usually range between 400–1,200 square feet, depending on local regulations, while tiny homes are typically 100–400 square feet, prioritizing ultra-minimalist living.
A key difference between ADUs and tiny homes is mobility. Tiny homes on wheels are designed to be moved, which gives owners location flexibility but also zoning challenges since many cities do not allow full-time residence in an RV on private property.
ADUs, in contrast, must be permanently built on-site and are required to have full utility connections for water, sewer, and electricity. Tiny homes often use off-grid solutions like composting toilets and solar panels, which may not be permitted under ADU regulations.
ADUs require a larger upfront investment but provide better long-term value. They typically cost between $100,000–$300,000, but they increase property value and can generate rental income.
Tiny homes are more affordable initially, often ranging from $30,000–$100,000. However, because of zoning and financing restrictions, they don’t always offer the same long-term financial benefits as ADUs.
While not all tiny homes qualify as ADUs, it’s possible to convert a tiny home into a legal ADU if it meets certain zoning and building code requirements. Here’s what you need to do:
If you already own a tiny home and want to use it as a rental or guest space, checking whether it can be retrofitted into a compliant ADU is a smart move. In some cases, it may be easier to build a new ADU from the ground up rather than modify an existing tiny home.
Not all tiny homes can be converted into ADUs. If your tiny home is on a permanent foundation, connected to utilities, and meets local zoning codes, you may only need minor modifications to qualify. However, suppose it’s on wheels or lacks permanent utility connections. In that case, you’ll likely need significant structural changes, or it may be more cost-effective to build a new ADU from the ground up. Before deciding, consult local zoning officials or an ADU expert to ensure your tiny home meets all requirements.
If you’re considering building an Accessory Dwelling Unit (ADU), the process can feel overwhelming at first. Between ADU codes, design choices, and financing options, there’s a lot to consider. But with the right approach, you can turn your property into a high-value, income-generating space. Here’s how to get started.
Zoning regulations vary widely by location, making it crucial to check local regulations before placing a tiny home on your property. Some local governments welcome tiny homes as ADUs, while others have strict minimum square footage requirements that disqualify them.
Additionally, many areas prohibit tiny homes on wheels from being used as permanent residences, classifying them as RVs instead. This means they may be restricted to RV parks or designated tiny home communities rather than private residential lots.
Some cities have started to relax regulations, allowing movable tiny homes as ADUs, provided they meet safety and utility connection requirements. However, these rules change often, so homeowners should always verify local ADU ordinances.
One major distinction between ADUs and tiny homes is financing and insurance eligibility. ADUs, being permanent structures, are easier to finance through home equity loans, construction loans, or ADU-specific grants. They also qualify for traditional homeowner’s insurance, making them a more secure investment.
Tiny homes, especially those on wheels, face financing and insurance challenges. Banks often view them as personal property rather than real estate, making it difficult to secure a mortgage or home loan. Instead, tiny home buyers may need RV loans, personal loans, or cash savings to finance their purchase.
Insurance can also be tricky because many providers will only cover tiny homes if they’re classified as stationary ADUs rather than movable dwellings. This can impact long-term livability, resale value, and rental potential.
Building an ADU in Cincinnati and surrounding areas is more accessible than ever, thanks to recent zoning changes. However, there are specific regulations homeowners need to follow:
In Cincinnati and many surrounding areas, you can build a separate structure (or tiny home) up to 800 sq. ft. and under 13 ft. in height without needing zoning or building permits. Additionally, home additions that expand your existing home are even more flexible. If you’re planning to build an ADU larger than 800 sq. ft., add additional height, or create a fully self-contained rental unit, you may need to go through the zoning and permitting process. This includes approvals for:
If you're unsure whether your project requires zoning approval, Casita can help you navigate the entire process!
Once you have approval, the next step is designing your ADU. Whether you’re building a detached unit, garage conversion, or basement apartment, planning the right layout is crucial.
When designing your ADU, consider:
Many homeowners work with architects, prefab ADU builders, or tiny home companies to create efficient designs that meet local codes and lifestyle needs. Prefab ADUs can be a cost-effective, fast-track solution, often completed in a matter of months.
Extra income, a place for family, or a way to boost your property value all make an Accessory Dwelling Unit (ADU) a smart and flexible investment. Unlike tiny homes, which often face zoning and legal hurdles, these housing units are permanent, insurable, and financeable, making them a more stable and long-term solution.
ADUs present an exciting opportunity for Cincinnati homeowners ready to capitalize on underutilized property space or create more affordable housing options for a loved one. With construction costs ranging from $175 to $250 per square foot, ADUs can provide affordable, high-value housing solutions while also generating passive rental income. Plus, with the city’s registration process now in place, building an ADU has never been more accessible.
At Casita, we make building an ADU easy so you can focus on what really matters: creating space for the moments and people you love. Whether you’re looking for a rental unit, a guest house, or a backyard retreat, our team can guide you through design, permitting, and construction in a simple and stress-free process.
