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ADU ROI Calculator — California
California is the strongest ADU market in the country. AB 976 (effective 2025) eliminated owner-occupancy requirements, enabling investors to rent both the main house and ADU simultaneously. High rents relative to other states mean California ADUs routinely achieve 7–12% cap rates despite higher construction costs.
Typical Project Cost
$220,000–$420,000
Typical Monthly Rent
$1,800–$3,800/mo
Cap Rate Range
6–12%
Break-Even Range
7–14 years
ADU Rental Income by City — California
Use these figures as a starting point when entering your expected monthly rent above.
| City | 1BR ADU Rent | 2BR ADU Rent | Avg Build Cost |
|---|---|---|---|
| San Francisco Bay Area | $2,500–$3,500/mo | $3,500–$4,800/mo | $280K–$420K |
| Los Angeles | $1,800–$2,800/mo | $2,600–$3,800/mo | $220K–$380K |
| San Diego | $1,700–$2,600/mo | $2,400–$3,500/mo | $200K–$340K |
| Sacramento | $1,200–$1,800/mo | $1,600–$2,400/mo | $160K–$260K |
California ADU ROI — Frequently Asked Questions
What is a good ADU ROI in California?
A cap rate of 7–10% is strong in California. Garage conversions and JADUs in LA, the Bay Area, or San Diego can achieve 12–18% cap rates due to low construction cost relative to achievable rents. Detached new-build ADUs typically yield 6–9%.
How much does it cost to build an ADU in California?
California ADU costs range from $80,000–$150,000 for garage conversions to $250,000–$450,000 for new detached builds. High labor costs, Title 24 energy compliance, and permit fees (now capped at $15,000 for ADUs under 750 sq ft statewide) are the main cost drivers.
How much can I earn renting an ADU in California?
ADU rental income varies by market. Bay Area ADUs rent for $2,200–$3,800/month (1BR), LA for $1,800–$2,800/month. Even Sacramento and Fresno have seen rents rise to $1,200–$1,800/month for well-located ADUs.
Does California require owner-occupancy for ADU rentals?
No. AB 976, effective January 1, 2025, eliminated California's owner-occupancy requirement. You can now rent both the main house and the ADU simultaneously, or own the property purely as an investment rental.