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ADU ROI Calculator — Texas
Texas ADU markets are led by Austin and Dallas, with strong population growth driving rental demand. Texas has no statewide ADU mandate — rules are set by individual cities — but most major Texas cities have relatively flexible ADU ordinances. Lower construction costs relative to coastal markets can drive strong cap rates.
Typical Project Cost
$130,000–$240,000
Typical Monthly Rent
$1,200–$2,200/mo
Cap Rate Range
7–12%
Break-Even Range
7–13 years
ADU Rental Income by City — Texas
Use these figures as a starting point when entering your expected monthly rent above.
| City | 1BR ADU Rent | 2BR ADU Rent | Avg Build Cost |
|---|---|---|---|
| Austin | $1,400–$2,200/mo | $1,900–$2,800/mo | $160K–$260K |
| Dallas | $1,100–$1,700/mo | $1,500–$2,200/mo | $130K–$220K |
| Houston | $1,000–$1,600/mo | $1,400–$2,100/mo | $120K–$200K |
| San Antonio | $900–$1,400/mo | $1,200–$1,800/mo | $110K–$190K |
Texas ADU ROI — Frequently Asked Questions
What is a good ADU ROI in Texas?
Texas ADUs typically achieve 8–12% cap rates, among the best in the country, due to lower construction costs and strong rental demand in Austin, Dallas, and Houston. Austin ADUs near employment centers can exceed 10% cap rates.
Are ADUs allowed in Austin, Texas?
Yes. Austin allows secondary dwelling units (ADUs) on lots in SF-3 and many other residential zoning districts. Maximum size is 850–1,100 sq ft depending on lot size. Austin has been actively streamlining ADU approvals and offers pre-approved plan options.
How much does it cost to build an ADU in Texas?
Texas ADU construction costs are lower than coastal markets. Garage conversions typically cost $80,000–$140,000. New detached ADUs range from $150,000–$260,000. Lower labor costs and fewer regulatory requirements reduce both construction and soft costs.