Prefab ADUs: Pros and Cons

Why Prefab ADUs Are Popular

Prefab ADUs are popular with homeowners who want to add extra living space to their property for the most affordable price and have no need or desire to customize their floor plan or interior design. Prefab units are essentially factory-designed and factory-assembled, with minimal customization options.

Prefab ADUs are also a popular option for homeowners who need to expand their space or create a detached unit quickly. They may find themselves needing an in-law unit much sooner than anticipated, for example, and these modular homes offer the shortest project timeline.

While these benefits are significant, homeowners must also be aware of the hidden costs of prefab ADU projects. While labor costs may be significantly reduced, there are costs associated with prefab builds that aren’t usually associated with stick-built construction, like transportation fees and crane fees. These additional costs can significantly offset the total savings on construction expenses and should be asked about specifically in any meeting you have with a prefab builder.

Prefab ADUs are a popular choice for homeowners who need extra space fast. With shorter construction timelines and affordable base costs, they’re perfect for quick solutions.

Comparing Prefab ADUs and Custom Built On-Site ADUs

There are several key differences between prefab ADUs and custom or built-on-site ADUs, especially when it comes to construction time, labor costs, durability, and long-term value

• Installation time. Prefab ADUs are associated with shorter construction timelines not only due to the method of construction but also because they utilize pre-approved plans, which speeds up the permit process. Custom ADUs involve custom designs that may result in project delays, especially if the building department asks for revisions.
• Labor costs. Prefab ADUs have lower labor costs since the work is done off-site and on a larger scale with other prefab units. Labor costs for custom or semi-custom ADUs tend to be higher, but this is often because more skilled labor is required to execute more unique or innovative designs.
• Construction delays. Given that modular units are built off-site in a completely controlled environment, there are minimal disruptions to the construction process. With stick-built ADUs, more materials need to be delivered, and various city inspections have to be done, all of which can lead to delays at certain construction phases if a shipment is late or a building inspector does not have an open appointment.

Where prefab ADUs can have delays, though, is with transportation, with a finished unit sitting in a warehouse for longer than expected before it is finally shipped to your site.

• Customization. Prefab homes may have a few customization options when it comes to the unit’s exterior finishes and interior design concepts, but these are limited. It’s actually the lack of customization options that allow these units to be built so quickly and for such a low base price. With custom accessory structures, every design element can potentially be modified to meet your exact specifications and needs for the space, meaning you always get exactly what you want.
• Durability. Prefab ADUs are also able to charge a lower base price compared to custom units because they do not use the same high-quality materials, so while they may give you the functional living space you need in the short term, they may deteriorate more quickly, costing you more in repairs in the long term.
• Return on investment. Though custom ADUs may cost more out-of-pocket initially, they often provide greater long-term value. Especially if you are looking to use your guest house as a rental unit, a custom ADU has better rental potential, allowing you to charge more per month to increase your passive income. A custom secondary unit also has a greater impact on your overall property value, increasing your profit margins if and when you go to sell.

Prefab ADUs are built off-site and then installed on your property, which speeds up construction but can involve added transportation and crane costs.

Factors to Consider with Prefab ADUs

Along with factors like durability, potential transportation delays, and lower ROI, another factor to consider when it comes to prefab units is the hidden fees not included with the base price. This includes the transportation fee and crane expenses, which we already mentioned, but also includes site preparation.

In order for the installation process to happen, the site must be prepped and ready. If your lot is level and no tree removal or demolition is needed, this preparation can be done easily and with minimal cost. However, if your yard is sloped or a lot of excavation is needed, this site work can be more extensive, which results in more costs. It’s important you understand what these costs may be before committing to a prefab unit, as it may offset the savings in labor and construction and make the modular route less appealing.

Site preparation is critical for prefab ADUs. From leveling your lot to managing utility connections, these factors can significantly impact your project’s budget and timeline.

Many property owners we work with are surprised to see how affordable a traditional, stick-built ADU project can be, especially when they begin with pre-approved or permit-ready ADU plans. You can look at some of Better Place’s most popular floor plans here and see what they might cost to build using our free cost calculator tool.

The table below breaks down the key factors to help you decide if a prefab ADU is the right choice for your needs, highlighting both its advantages and limitations.

Choose Better Place for Your ADU

At Better Place, we specialize in on-site ADU builds because we believe it ensures our homeowners get the most out of their investment.

When you work with an experienced builder like Better Place, you will find they can help you avoid many potential hang-ups, like building permit approvals and construction delays, and help you bring your project to life quicker and for less money than you may have thought possible.

To learn more about your property’s ADU potential, schedule a free consultation.