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ADU ROI Calculator — Arizona
Arizona's ADU market is centered on the Phoenix metro, one of the fastest-growing rental markets in the US. Phoenix, Scottsdale, Tempe, and Mesa all allow ADUs with relatively straightforward permitting. Lower construction costs and strong in-migration keep rental demand robust.
Typical Project Cost
$130,000–$230,000
Typical Monthly Rent
$1,200–$2,200/mo
Cap Rate Range
7–11%
Break-Even Range
8–13 years
ADU Rental Income by City — Arizona
Use these figures as a starting point when entering your expected monthly rent above.
| City | 1BR ADU Rent | 2BR ADU Rent | Avg Build Cost |
|---|---|---|---|
| Phoenix | $1,200–$1,800/mo | $1,600–$2,400/mo | $130K–$210K |
| Scottsdale | $1,600–$2,400/mo | $2,100–$3,000/mo | $160K–$260K |
| Tempe | $1,300–$1,900/mo | $1,700–$2,500/mo | $140K–$230K |
| Tucson | $900–$1,400/mo | $1,200–$1,800/mo | $110K–$190K |
Arizona ADU ROI — Frequently Asked Questions
What is a good ADU ROI in Arizona?
Arizona ADUs typically achieve 8–11% cap rates. Phoenix and Tempe are strong markets with consistent rental demand. Scottsdale yields are lower (7–9%) despite higher rents because construction costs are also higher in that market.
Are ADUs allowed in Phoenix?
Yes. Phoenix allows accessory dwelling units in R1 and R2 zoning districts. Maximum size is 1,200 sq ft or 50% of the primary dwelling. Phoenix has a streamlined ADU permit process and typically processes applications in 60–90 days.
How much does it cost to build an ADU in Phoenix?
Phoenix ADU costs range from $100,000–$150,000 for garage conversions to $160,000–$250,000 for new detached builds. Arizona's moderate labor costs and simpler regulatory environment make it one of the more cost-effective states for ADU construction.