ADU ROI Calculator — Does Your Project Actually Pencil Out?
Free, no signup. Estimates gross yield, cash-on-cash return, payback period, and break-even rent for a California ADU using May 2026 rate inputs (Federal Reserve H.15, Bankrate, FHFA National Mortgage Database). Inputs are field-tracked across 12 LA-area projects, calibrated quarterly. Sometimes the calculator points at “don't build” — and we say that clearly. ADUscale is not a lender, mortgage broker, or financial advisor; we do not originate loans or provide investment advice.
Not financial advice. ADUscale is not a financial advisor, lender, or mortgage broker. All figures are field-tracked estimates for planning purposes. Consult a licensed CPA, financial advisor, or tax attorney for advice specific to your situation.
Three steps. About two minutes end to end.
Enter your inputs
Property address (we pull county assessor and Zillow rent estimate from it), expected all-in construction cost, expected monthly rent, your financing path (HELOC, cash-out refi, construction loan, or cash), and your current primary mortgage rate. The last one drives the lock-in penalty math on the cash-out refi scenario.
See your scenario comparison
The calculator runs your numbers through the financing path you chose, side-by-side against the LA-area market median for a similar project. Gross yield, cash-on-cash, monthly net cash flow, simple payback period, and break-even rent. If the project looks marginal, the result screen flags it.
Download a one-page PDF
Same numbers as the on-screen result, plus the formulas and the rate assumptions used. Email-gated; no phone call required.
What you enter — and why each field matters
We pull the county assessor record and Zillow rent estimate from your address. Not stored on our servers; used only to populate the form.
Include permits, design, soils report, sewer lateral upgrade, and contingency. Field-tracked range for LA-area detached ADU: $200K–$350K (LADBS permit data plus contractor bid field tracking, 2026). See the LA cost guide.
From comparable ADU rents in your area, not the headline Zillow listing rent. Don't overestimate. Vacancy assumes 5%–8% in tight urban markets and 10%–15% in suburban or exurban markets.
HELOC keeps your low primary mortgage rate intact. Cash-out refi resets it. Construction loan is the usual path for new detached builds with limited existing equity. See the Lock-In Calculator for the path-comparison math.
If you bought between 2020 and 2022, you're likely below 5%. Roughly 80% of California homeowners hold a mortgage below 5% (FHFA National Mortgage Database). Sub-5% rates are the most valuable financial asset most homeowners own. Don't lose them without need.
What the calculator returns — and what it actually means
Annual rent divided by all-in construction cost. Useful for comparison against other real estate. Ignores debt service, vacancy, and maintenance. Typical California ADU gross yield in May 2026: 8%–11% (Zillow, Apartment List, field-tracked).
Annual net cash flow divided by the cash you actually wrote a check for: down payment and out-of-pocket soft costs, not the financed amount. The number that matters if you financed.
Rent minus debt service, vacancy reserve, maintenance reserve, insurance, and the property tax delta from your new ADU structure. A small positive number is normal in the early years of a financed project; a large negative number means the project doesn't pencil on income alone.
All-in cost divided by annual net rent. Cash scenarios typically pay back in 9–11 years. HELOC-financed scenarios extend to 15–20 years because debt service eats into the cash flow that would otherwise repay the principal.
The minimum monthly rent required to cover debt service plus vacancy and maintenance reserves. If the market rent in your area is below this number, the project doesn't pencil on rental income alone. Value-add on sale may still justify it, but that's a different thesis.
What the calculator deliberately doesn't model
Five things left out — because honest defaults beat hidden assumptions.
Construction overruns
We see 15%–30% overruns in roughly 35%–45% of California ADU projects per the InspectPilot 11M-record project finance dataset. The calculator assumes your all-in cost is accurate. If it's not, run again at +20% to see the sensitivity. See why ADU projects go wrong.
Permit delays beyond the LADBS 60-day shot clock
A 3-month delay on a construction loan at 9% adds roughly $7,000 in carrying cost on a $250K balance. The calculator assumes a clean permit path.
Tax depreciation benefits
The ADU structure depreciates over 27.5 years for federal income tax purposes, which can offset rental income dollar-for-dollar. See tax treatment. Not modeled here because the benefit varies by your specific tax situation.
Property value uplift
ADUs add roughly 50–80 cents per dollar of construction cost to appraised value (UC Berkeley Terner Center, field-tracked, May 2026). Not liquid until you sell or refinance. The calculator runs the rental-income thesis only.
Long-term rent growth or rate environment shifts
The calculator runs a “rates and rents stay flat” scenario. California historical rent growth runs 3%–4% annually, which shortens payback by 12–18 months over a 10-year hold. The calculator surfaces the conservative case.
If your numbers look marginal…
If the calculator points at gross yield below 7%, payback past 18 years, or break-even rent above local comparable rents, the next step is the $199 Feasibility & Risk Assessment. That's where we model your specific site, your specific contractor pool, and your specific lender quotes. About 1 in 7 of those written reports recommend “wait” or “don't build.” We say it that clearly because we work on the build side — inspection-gated payments, no extra cost to you.
ROI Calculator — common questions
Yaro Korets — Founder, ADUscale
Yaro Korets, Founder of ADUscale. ADUscale is a California build-side ADU partner: we help homeowners secure one of the state's top contractors, expand that contractor's capacity to take the project, and protect the budget with inspection-gated milestone payments — at the same price as going direct. Not a lender or financial advisor — we help you find the right financing and connect you with a lender. ROI math is calibrated against Federal Reserve H.15 for current California lender rate sheets, FHFA National Mortgage Database for the lock-in distribution, LADBS permit cost data, Zillow Rent Index and Apartment List rent data, UC Berkeley Terner Center field research on ADU value uplift, and the InspectPilot 11M-record project finance dataset. ADUscale is not a lender, mortgage broker, or financial advisor; we do not originate loans or provide investment advice. The ROI Calculator is informational. Your specific lender will issue a binding quote.
California-based independent Owner's Representative service. Last updated: May 2026.
The ROI Calculator is a 90-second decision tool.
It answers “does this project pencil.” Free Reality Check for lot eligibility. Lock-In Calculator for financing-structure math. Then the $199 Feasibility & Risk Assessment if you want a written, site-specific answer with contractor pool and lender-quote analysis. We work on the build side at the same price as going direct — so the answer the calculator surfaces is the answer the math actually gives. Sometimes that answer is don't build, and we say so clearly.