Garage ADU: What It Is, Costs, Rules, and Conversion Options

TL;DR: Garage ADU

• A garage ADU is a legal accessory dwelling unit created by converting an existing garage into a self-contained living space.
• Garage ADUs reuse the existing structure, which often reduces cost and build time compared to new construction.
• Most projects require zoning review, permits, utility upgrades, and interior build-out, with fewer setback limitations for existing garages.
• Timelines typically span several months, depending on city review, scope, and structural conditions.
• Costs are usually lower than new detached ADUs but vary based on utilities, finishes, and garage condition.
• This article covers definitions, costs, zoning rules, design considerations, timelines, ROI, and garage ADU options.

Garage ADU is a type of accessory dwelling unit created by converting an existing garage into a self-contained living space with a kitchen, bathroom, and separate entrance. The process typically includes zoning review, permits, utility upgrades, and interior construction while using the existing structure. Because the foundation and walls are already in place, garage ADUs often cost less and can be completed faster than new builds.

Key Takeaways

If you have a detached garage on your property that isn’t being used much, converting it into an accessory dwelling unit (ADU) is a worthwhile investment. Detached garage ADUs provide the same increase in property value and potential rental income as traditional new construction but for $100,000+ less. They also can typically be completed in less time and, in some cases, can help avoid certain zoning laws that may accompany a new build. Despite being a simpler build, however, it’s important to hire a professional ADU builder to oversee the construction.

Ensure you evaluate both cost savings and timeline benefits when planning your garage conversion.

What is a Detached Garage ADU?

A detached garage ADU is a detached 1-car or 2-car garage that has been converted into an independent living space with a kitchen and bathroom. If a detached garage is converted into a rec room, art studio, storage space, or pool house without a kitchen or a bathroom, it isn’t considered an ADU.

Detached garage ADUs are growing in popularity because they’re much easier and more cost-effective to build than new construction but can still serve a variety of purposes for homeowners, including:

• Granny flat for elderly parents
• Apartment for adult children
• A rental unit
• A guest house

Prioritize adding a full kitchen and bathroom to qualify your conversion as a true ADU

What Does “ADU Garage” Mean?

An ADU garage is a general term people use to describe an accessory dwelling unit that is either created from a garage or built in connection with one. The phrase is not a legal category but a catch-all term that can refer to several different ADU configurations involving garages.

Common uses of the term “ADU garage” include:

• A garage conversion ADU where an existing garage is converted into living space
• A detached garage ADU that was once a garage and now functions as a standalone unit
• An ADU with a garage, where the living space and garage coexist in one structure
• An above-garage ADU (also called a carriage house)

How to interpret “ADU garage” correctly:

1. Identify whether the garage is being converted or remaining a garage
2. Determine whether the structure is attached or detached
3. Confirm whether the final design includes a kitchen and bathroom, which makes it a legal ADU

Quick Answers

• Is “ADU garage” a legal term? No. Cities regulate ADUs by type (attached, detached, conversion), not by informal phrases like “ADU garage.”
• Does an ADU garage always start as a garage conversion? Not always. Some ADUs are newly built structures that include a garage, while others convert an existing garage.
• Is a garage apartment the same as an ADU garage? Only if it includes a kitchen and bathroom and meets local ADU requirements.
• Why do people use this term so often? Because it’s a convenient way to describe multiple garage-related ADU options without knowing the technical distinctions.

Benefits of Detached Garage ADUs

The benefits of a detached garage ADU are many and include:

• Increased Property Value: Though converted from an existing structure, once completed, detached garage ADUs increase your property value just as much as a new construction detached ADU of similar size. In many cases, this is as much as 35%!
• Rental Income: Detached garage ADUs, like all detached ADUs, are highly desirable among renters in the San Diego area, given the increased privacy and the feel of a standalone house. For that reason, they can generate thousands of dollars of rental income each month.
• Versatility and Adaptability: Detached ADUs, including those converted from a detached garage, offer the most versatility in terms of usage. Although your garage conversion project may initially serve as a home office, it can easily serve as a rental property or guest house in the future.
• Cost-effectiveness: Garage conversion costs are often substantially less than traditional new construction because the foundation, exterior structure, and roof have already been built. In many cases, this can save homeowners $100,000 or more in total construction costs.
• Maintained backyard space: Once complete, detached garage ADUs provide homeowners with a separate living space that doesn’t take square footage from their yard, which is important to many San Diego homeowners who may have a smaller lot to begin with.

Leverage your new ADU’s rental potential by marketing its privacy and standalone appeal.

Can an ADU Have a Garage? (ADU With Garage vs. Garage Conversion)

Yes, an ADU can include a garage, but this is different from converting a garage into an ADU. An **ADU with a garage** is designed so that living space and parking or storage coexist, either side-by-side or stacked vertically.

Common ADU-with-garage configurations:

• A detached ADU with an attached garage
• An above-garage ADU built on top of an existing or new garage
• A new detached ADU where the lower level is a garage and the upper level is living space

High-level differences between options:

1. Garage conversion ADU: Removes parking but typically costs less and builds faster
2. ADU with garage: Preserves parking but often increases cost, engineering, and permitting complexity

Quick Answers

• Is an ADU with a garage allowed everywhere? No. Some cities restrict second-story ADUs or have specific design rules for garages.
• Is an above-garage ADU the same as a detached ADU? It can be, but above-garage ADUs often require additional structural upgrades and fire separation.
• Does keeping a garage increase rental value? Sometimes, but not always enough to offset the higher construction cost.
• Which option is better for most homeowners? Garage conversions are usually simpler and more cost-effective, while ADUs with garages prioritize parking preservation.
• Do ADUs with garages take longer to build? Yes. Additional engineering, inspections, and approvals often extend timelines compared to conversions.

Comparison: ADU With Garage vs Garage Conversion

Do You Need Planning Permission to Convert a Detached Garage into a Dwelling?

Though your detached garage may be built legally, there are still permissions you need to get and regulations you have to follow when converting it into a backyard home. 

Understanding Zoning and Permits

In almost every respect, detached garage ADUs must follow the same zoning laws and permitting process as traditional ADUs. The one exception pertains to setback limits. 

New ADU builds in California must have a 4-foot setback from the side and rear property lines. If your existing garage is closer to the property line than that, it can still be converted to an ADU and doesn’t have to follow the same setback limits as new builds (assuming it was built legally, of course).

Though garage ADUs must obtain a building permit like other types of ADU construction, the permitting process for garage conversions can be faster, as the exterior structure is already built.

Check your garage’s existing setbacks first—legal pre-built structures can bypass some new-build restrictions.

Can You Build an ADU on Top of a Garage?

An above-garage ADU, also known as a carriage house, is a great way to preserve parking space and storage space while still adding functional living space to your property. However, not every city allows it.

Some cities in the San Diego area ban 2nd-story ADUs; others only allow them if your existing single-family home is also 2 stories. If you’re part of a homeowners association, you also need to check what their rules are surrounding ADUs. While HOAs can’t prevent the building of ADUs outright, they can put limitations on them, including not allowing 2-story ADUs.

The best way to know if a carriage house-style ADU is allowed on your property is to contact your local building department or consult an experienced ADU builder in your area.

What is the Largest that a Detached Garage ADU Can be?

Detached garage ADUs follow the size limitations of traditional detached ADUs, which means they can be as large as 1200 square feet (though some cities cap the maximum size at 1000 square feet). Confirm the maximum size for your city with your local building department.

Cost Analysis for Detached Garage ADUs

How Much to Convert a Detached Garage into an ADU?

The average cost for the conversion process is between $150,000 and $200,000. This is certainly a sizable financial investment but about half of what we would estimate for a totally new build.

The major costs in that $150-200,000 include:

• Permit fees – around $5000
• Architectural & design fees – between $7500 and $10,000
• Utility connections – between $15,000 and $30,0000
• Interior finishes – between $25,000 and $50,000
• Kitchen & appliances – between $10,000 and $20,000
• Bathroom fixtures – between $7500 and $15,000
• Exterior finishes – between $15,000 and $30,0000
• Contingency & extra costs- between $15,000 and $25,000

In recent years, garage ADU costs have increasingly been influenced by utility capacity, energy efficiency requirements, and electrical upgrades. Many projects require panel upgrades, heat-pump systems, improved insulation, and Title 24 compliance measures, which can affect the final budget even when the garage structure already exists.

You can read more about construction costs in our blog post here, or you can use our cost calculator tool.

Allocate a 10–15% contingency fund to account for unexpected structural or permit-related costs.

Is It Cheaper to Tear Down My Garage and Start from Scratch?

In general, no. It’s significantly more cost-effective to convert an existing garage than to tear it down and start from scratch. There are some exceptions to this, particularly when it comes to your current garage’s structural integrity.

Assessing the Structural Integrity of Your Garage

In rare cases, the garage floors, walls, and roof are all in such poor condition that it’s necessary to tear down the whole structure and start again.

If one of these elements needs repairs—which is not uncommon—a structural engineer can handle the repairs and bring the structure up to shape so it can become a comfortable and livable space.

If you’d like to build an ADU that’s larger than your current garage, it’s often more cost-effective to add space to the garage than tear it down completely.

Breaking Down the Demolition Process

One of the reasons it’s almost always more cost-effective to use the existing garage structure, even if some repairs are required, is that tearing an existing structure down involves demolition costs. The structure must be torn down and the debris cleared before foundation work can begin. This can cost an additional $5000 to $10,000 and adds to your overall construction timeline.

Evaluating the Return on Investment (ROI) for Detached Garage ADU Conversions

Most homeowners find that converting their detached garage into an ADU is well worth the cost of construction, increasing their property value by as much as 35%. More than that, in Southern California’s competitive housing market, these ADUs can also generate tens of thousands of dollars per year in rental income.

For many homeowners we work with, the income they receive from renting out a detached ADU is even higher than their construction loan payments, so they can pay off their loan and still have a positive net income. You can read a real-life example of that here.

Garage Conversion ADUs vs. New Construction ADUs

While garage conversion and new construction ADUs both result in a beautiful, new independent living facility, there are differences that extend beyond cost.

To decide which construction is right for you, you need to consider timeline, permitting, the impact on the property, and what level of customization will ultimately best fulfill your desired use.

Design and Construction Process for Detached Garage ADUs

While much of the most difficult and expensive work is already done for you with a detached garage, the construction process is still quite detailed, including careful layout planning and design.

Planning Your Detached Garage ADU Layout & Design

Though you’re working with an existing structure, there’s still design complexity when it comes to the layout and design of your additional dwelling unit. Consider questions like: 

• Do you want a studio, 1-bedroom, or 2-bedroom ADU?
• Do you want 1 bathroom or 2?
• Do you want dedicated outdoor space?
• How and where will you add storage to make the unit as livable as possible?
• What design style will you choose: California coastal, midcentury modern, Spanish-style, or something else?

Map out utility routing early to avoid mid-construction delays and fee surcharges.

Navigating Building Codes and Compliance for Detached Garage ADUs

Even if you have a permitted garage, you still need to obtain a building permit to convert it into an ADU. This means you need to submit building plans that meet your city’s height restrictions, electrical and plumbing requirements, and (if you aren’t close to public transit) replacement parking requirements.

Prioritizing Fire Safety and Emergency Exits

Fire safety is also part of building codes. Any kind of detached structure used as an ADU must include:

• At least one egress window in sleeping areas
• Hardwired smoke and carbon monoxide detectors
• Minimum clearance distances between structures for fire access

Essential Electrical and Plumbing Upgrades for Detached Garage ADUs

The costs for electrical and plumbing in a garage conversion are often comparable to those for a completely new build. Garages often lack plumbing, and any existing electrical systems require upgrading and connection to a new electrical panel.

Read more about electrical requirements for ADUs here, and learn more about plumbing costs here.

Maintaining Proper Insulation and Ventilation in Detached Garage ADUs

Garages often have little to no insulation or ventilation. These will need to be added not only to make the space comfortable and safe but also to comply with Title 24.

Enhancing Space Efficiency and Functionality

Especially when you consider that most garage conversions are under 500 square feet, you have to be smart with your design and finishes to maximize efficiency and functionality. Features like open-concept kitchen and living rooms, multifunctional furniture, high ceilings, light paint colors, and built-in storage all help homeowners take full advantage of even a compact space.

How Long Does It Take to Convert a Detached Garage into an ADU?

It varies from project to project, but generally, we tell homeowners to anticipate a project timeline of between 3 and 6 months for this type of building project. This includes:

• Design & permitting – between 6 and 12 weeks
• Construction – 8+ weeks

Why Choose Better Place Design & Build for Your ADU Project?

While converting a 1- or 2-car garage into an ADU might be the “easiest” way to get the backyard cottage or extra living space of your dreams, there are still many aspects of the construction phase that are best handled by a professional, from permit application to design plans.

At Better Place, we can help you convert your detached garage—or even your attached garage!—into the space you need to achieve long-term multigenerational living or generate monthly income. We pride ourselves not only on our workmanship but on our transparency and clear communication throughout the construction project. See the Better Place difference for yourself and schedule a free consultation today.