How Much Does It Cost to Build a Casita in all 50 States?

Building and renting a Casita on your property could be a great way to earn additional income. It’s much cheaper than purchasing a new property and is often a beginner-friendly way for new investors to get their feet wet in real estate investing. 

However, the cost of building a casita and the potential upsides ultimately hinge on the state and local laws you’re subject to. 

In this article, we will take a brief look at how much it will cost to build a casita in all 50 states and what you stand to gain (whether you treat your casita as a rental unit or an extension of your home).

What is a Casita?

A casita, also known as an Accessory Dwelling Unit (ADU), is a separate living space that exists on the same property as a primary residence. A casita can be attached to an existing structure or detached from the main property. This type of accessory dwelling unit can vary in size and function. For instance, it can operate as a short-term or long-term rental or simply serve as a backyard guest house for visiting family members. 

Now that you have the definition of a casita squared away, it’s time to dig into the casita construction costs (including the cost of acquiring the necessary building permits). 

Alabama

• Average Construction Cost
  • $100-$200 per square foot.
• Rental Income Potential
  • $700-$1500 per month, depending on the area. Short-term rentals near the beach can rent for much more in peak summer seasons.
• State and Local Regulations
  • While there are no State and Local Regulations for ADU development, some cities have specific requirements for ADU development. For example, in Foley, an ADU cannot exceed 60% of the principal residence. Additionally, residents are subject to a limit of one ADU per lot.

Alaska

• Average Construction Cost
  • $200-$300 per square foot
• Rental Income Potential
  • $800-$1500 per month, with higher rates cropping up in populated cities like Anchorage.
• State and Local Regulations
  • Some cities, like Anchorage, permit ADUs with size and occupancy restrictions.

Arizona

• Average Construction Cost
  • $150-$250 per square foot.
• Rental Income Potential
  • $700-$1500, with higher earnings in areas like Scottsdale, Queen Creek, and areas of Phoenix.
• State and Local Regulations
  • Arizona law permits the construction of casitas on single-family home lots in cities with populations over 75,000 residents.

Arkansas

• Average Construction Cost
  • $100-$200 per square foot.
• Rental Income Potential
  • $500-$900 per month, varying by location.
• State and Local Regulations
  • No statewide regulations; local jurisdictions govern ADU policies.

California

• Average Construction Cost
  • $200-$400 per square foot.
• Rental Income Potential
  • $1,500-$3,000 per month, depending on the region.
• State and Local Regulations
  • California has implemented laws to encourage ADU construction and reduce bureaucratic hurdles. Currently, ADUs up to 1,200 square feet are permitted. 

Colorado

• Average Construction Cost
  • $150-$300 per square foot.
• Rental Income Potential
  • $1,000-$2,000 per month, higher in cities like Denver.
• State and Local Regulations
  • Regulations vary by municipality. Denver has expanded citywide access for ADU construction, simplifying the process and reducing specific requirements.

Connecticut

• Average Construction Cost
  • $200-$350 per square foot.
• Rental Income Potential
  • $1,200-$2,500 per month. Monthly earnings will be contingent on the unit’s proximity to local attractions and hotspots. 
• State and Local Regulations
  • Recent legislation has reduced zoning restrictions on ADUs in Connecticut, making it easier for homeowners to construct them.

Delaware

• Average Construction Cost
  • $150-$250 per square foot.
• Rental Income Potential
  • $800-$1,500 per month.
• State and Local Regulations
  • Senate Bill 23 mandates that all local governments in Delaware permit the construction of at least one ADU on properties with single-family dwellings.

Florida

• Average Construction Cost
  • $150-$300 per square foot
• Rental Income Potential
  • $1000-$2,500 per month, with coastal areas yielding higher revenue potential.
• State and Local Regulations
  • Regulations vary by county. For example, In Miami-Dade County, a lot must be at least 7,500 square feet, and the ADU’s size must be between 400-800 square feet.

Georgia

• Average Construction Cost
  • $130-$250 per square foot
• Rental Income Potential
  • $800-$1800 per month with higher rates in Atlanta
• State and Local Regulations
  • In Atlanta, the maximum size for an ADU is 750 square feet, with a height limit of 20 feet.

Hawaii

• Average Construction Cost
  • $250-$450 per square foot
• Rental Income Potential
  • $1500-$4000 per month. Space on an Island is limited, and prices reflect that.
• State and Local Regulations
  • Hawaii is a less hospitable environment for ADU development. ADU-applicable regulations are ultimately designed to protect against overdevelopment.

Idaho

• Average Construction Cost
  • $120-$200 per square foot
• Rental Income Potential
  • $700-$1500 per month
• State and Local Regulations
  • Local jurisdictions control most ADU policies. Boise is known for flexible and supportive ADU regulations.

Illinois

• Average Construction Cost
  • $150-$300 per square foot.
• Rental Income Potential
  • $1,000-$3000 per month
• State and Local Regulations
  • To help provide more housing, Chicago recently introduced the Additional Dwelling Units (ADU) Ordinance, reinstating the ability to create ADUs in attics, basements, and accessory buildings

Indiana

• Average Construction Cost
  • $120-$220 per square foot
• Rental Income Potential
  • $700-$1400 per month.
• State and Local Regulations
  • Different cities in Indiana have different laws pertaining to casitas, but generally, the state is casita-friendly. For example, in Bloomington, property owners don’t need to notify neighbors to get approval.

Iowa

• Average Construction Cost
  • $120-$200 per square foot.
• Rental Income Potential
  • $600-$1200 per month
• State and Local Regulations:
  • Iowa tends to be a little less friendly for ADU development–likely because they don’t have the same housing demand. Des Moines, in particular, has strict ADU requirements, specifying a maximum size and location parameters. 

Kansas

• Average Construction Cost
  • $110-$210 per square foot.
• Rental Income Potential
  • $600-$1300 per month.
• State and Local Regulations
  • Kansas City restricts the use of ADUs for short-term rentals.

Kentucky

• Average Construction Cost
  • $120-$220 per square foot
• Rental Income Potential
  • $700-$1500 per month
• State and Local Regulations
  • No statewide ADU regulations. In Lexington, Kentucky, ADUs are only allowed in certain zones. 

Louisiana

• Average Construction Cost
  • $130-$250 per square foot
• Rental Income Potential
  • $800-$1600 per month
• State and Local Regulations
  • In New Orleans, casitas must be under 500 square feet.

Maine

• Average Construction Cost
  • $140-$260 per square foot
• Rental Income Potential
  • $900-2000 per month.
• State and Local Regulations
  • In 2022, Maine introduced legislation that allows ADUs on single-family lots.

Maryland

• Average Construction Cost
  • $150-$275 per square foot.
• Rental income Potential
  •  $1000-2200 per month
• State and Local Regulations
  • Regulations vary by municipality. For example, Montgomery County allows ADUs but requires special rental licenses and building permits. 

Massachusetts

• Average Construction Cost
  • $160-$300 per square foot
• Rental Income Potential
  • $1200-$2500 per month
• State and Local Regulations
  • Massachusetts is generally more hostile to ADU development but is starting to relieve some regulations. Boston allows ADUs only in select neighborhoods under a pilot program. 

Michigan

• Average Construction Cost
  • $140-$260 per square foot
• Rental Income Potential
  • $900-$2000 per month
• State and Local Regulations
  • Each city has different rules. Detroit allows both attached and detached ADUs, while Portage and Holland only permit them in specific zones.

Minnesota

• Average Construction Cost
  • $150-$280 per square foot.
• Rental Income Potential
  • $1000-$2200 per month
• State and Local Regulations
  • The populated area of Minneapolis permits ADUs in all residential districts and doesn’t require owner-occupancy.

Mississippi

• Average Construction Cost
  • $120-$230 per square foot.
• Rental Income Potential
  • $600-$1400 per month.
• State and Local regulations
  • There are no statewide ADU laws, and most municipalities aren’t explicit about ADU guidelines, meaning development can be challenging.

Missouri

• Average Construction Cost
  • $130-$250 per square foot.
• Rental Income Potential
  • $700-$1,600 per month.
• State and Local Regulations
  • Kansas City allows ADUs but requires owner occupancy. Some areas mandate off-street parking for ADUs.

Montana

• Average Construction Cost
  • $140-$270 per square foot.
• Rental Income Potential
  • $800-$1,800 per month.
• State and Local Regulations
  • In 2023, Montana enacted Senate Bill 528, mandating that municipalities permit at least one ADU per SFH lot.

Nebraska

• Average Construction Cost
  • $120-$240 per square foot.
• Rental Income Potential
  • $700-$1,500 per month.
• State and Local Regulations
  • Omaha allows ADUs in certain zones. Regulations include size restrictions and owner-occupancy requirements.

Nevada

• Average Construction Cost
  • $150-$290 per square foot.
• Rental Income Potential
  • $1,000-$2,400 per month.
• State and Local Regulations
  • In areas governed by the Tahoe Regional Planning Agency, ADUs are permitted on parcels larger than one acre.

New Hampshire

• Average Construction Cost
  • $140-$270 per square foot.
• Rental Income Potential
  • $900-$2,000 per month.
• State and Local Regulations
  • Since 2017, New Hampshire law requires local zoning ordinances to permit at least one ADU on any single-family lot

New Jersey

• Average Construction Cost
  • $160-$310 per square foot.
• Rental Income Potential
  • $1,200-$2,600 per month.
• State and Local Regulations
  • Regulations vary by city. Princeton generally allows ADUs but still imposes owner-occupancy requirements and additional parking provisions.

New Mexico

• Average Construction Cost
  • $140-$280 per square foot.
• Rental Income Potential
  • $900-$2,200 per month.
• State and Local Regulations
  • Santa Fe allows ADUs but enforces strict size, design, and parking requirements. For example, owner occupancy is required.

New York

• Average Construction Cost
  • $180-$350 per square foot.
• Rental Income Potential
  • $1,500-$3,500 per month.
• State and Local Regulations
  • NYC permits basement/cellar ADUs in select areas. When ADUS are permitted, strict building codes and owner-occupancy rules apply.

North Carolina

• Average Construction Cost
  • $140-$270 per square foot.
• Rental Income Potential
  • $900-$2,000 per month.
• State and Local Regulations
  • Raleigh allows ADUs but imposes size and parking restrictions. Owner occupancy may be required in some zones.

North Dakota

• Average Construction Cost
  • $130-$250 per square foot.
• Rental Income Potential
  • $800-$1,500 per month.
• State and Local Regulations
  • No statewide ADU regulations. However, in cities like Fargo, ADUs are permitted but are subject to owner occupancy. Other cities like Grand Forks cap unit size, despite allowing ADUs in select residential zones.

Ohio

• Average Construction Cost
  • $120-$240 per square foot.
• Rental Income Potential
  • $700-$1,600 per month.
• State and Local Regulations
  • Columbus allows ADUs but imposes strict setback and height limits. Cleveland permits ADUs in designated residential zones, though they must match the main dwelling’s design.

Oklahoma

• Average Construction Cost
  • $110-$220 per square foot.
• Rental Income Potential
  • $600-$1,400 per month.
• State and Local Regulations
  • Oklahoma City permits ADUs in certain zones but sets guidelines around a minimum lot size. Tulsa recently adopted ADU-friendly regulations but requires off-street parking.

Oregon

• Average Construction Cost
  • $160-$300 per square foot.
• Rental Income Potential
  • $1,200-$2,800 per month.
• State and Local Regulations
  • Oregon has one of the most progressive ADU policies. State law mandates that all cities allow at least one ADU on single-family lots. Cities like Portland encourage ADU construction by waiving system development charges.

Pennsylvania

• Average Construction Cost
  • $140-$280 per square foot.
• Rental Income Potential
  • $800-$2,000 per month.
• State and Local Regulations
  • Philadelphia allows ADUs by right in certain residential districts. Pittsburgh has been gradually updating zoning laws to allow ADUs in more areas, though parking and lot size restrictions still apply.

Rhode Island

• Average Construction Cost
  • $150-$300 per square foot.
• Rental Income Potential
  • $1,000-$2,500 per month.
• State and Local Regulations
  • State law mandates that all municipalities permit ADUs for family members. Rental ADUs, however, are subject to local zoning approval.

South Carolina

• Average Construction Cost
  • $130-$270 per square foot.
• Rental Income Potential
  • $800-$2,200 per month.
• State and Local Regulations
  • Charleston and Columbia allow ADUs in some zones, but owner occupancy is often required. Many suburban areas still prohibit ADUs.

South Dakota

• Average Construction Cost
  • $120-$250 per square foot.
• Rental Income Potential
  • $700-$1,500 per month.
• State and Local Regulations
  • Sioux Falls permits ADUs with size limitations and setback requirements. Other cities, like Rapid City, have been slower in adopting ADU-friendly policies.

Tennessee

• Average Construction Cost
  • $130-$260 per square foot.
• Rental Income Potential
  • $900-$2,400 per month.
• State and Local Regulations
  • Nashville allows ADUs in designated urban zones but prohibits them in some suburban areas. Knoxville recently updated zoning laws to allow ADUs on more properties.

Texas

• Average Construction Cost
  • $130-$280 per square foot.
• Rental Income Potential
  • $1,000-$3,000 per month.
• State and Local Regulations
  • Austin has some of the most relaxed ADU laws, allowing units up to 1,100 square feet. Houston allows ADUs with minimal restrictions. However, Dallas requires owner occupancy for most ADUs.

Utah

• Average Construction Cost
  • $140-$300 per square foot.
• Rental Income Potential
  • $800-2500 per month.
• State and Local Regulations
  • Utah has actually mandated that all cities in Utah allow the development of ADUs, but local governments are granted the jurisdiction to impose certain restrictions.

Vermont

• Average Construction Cost
  •  $150-$300 per square foot
• Rental Income Potential
  • $1000-2200 per month
• State and Local Regulations
  • All single-family properties can add at least one ADU in Vermont

Virginia

• Average Construction Cost
  • $140-$280 per square foot.
• Rental Income Potential
  • $1000-2400 per month.
• State and Local Regulations
  • Arlington and Alexandria allow ADUs but impose strict setback and height limits. Richmond recently expanded ADU allowances in residential zones.

Washington

• Average Construction Cost
  • $160-$320 per square foot.
• Rental Income Potential
  • $1200-$3000 per month
• State and Local Regulations
  • State law requires cities with over 20,000 residents to allow ADU development. Seattle even allows two ADUs per lot.

West Virginia

• Average Construction Cost
  • $120-$250 per square foot.
• Rental Income Potential
  • $700-$1,500 per month.
• State and Local Regulations
  • No statewide ADU laws apply in West Virginia. Morgantown allows ADUs with size and setback restrictions in place, but rural areas generally do not.

Wisconsin

• Average Construction Cost
  • $130-$270 per square foot.
• Rental Income Potential
  • $900-$2,000 per month.
• State and Local Regulations
  • Madison allows ADUs but requires owner occupancy. Milwaukee permits ADUs in select residential zones with design and size restrictions.

Wyoming

• Average Construction Cost
  • $140-$280 per square foot.
• Rental Income Potential
  • $1,000-$2,400 per month.
• State and Local Regulations
  • No statewide ADU policy. Jackson and Cheyenne allow ADUs in some residential areas but require special permits.

Alternative to ADU Construction

If constructing an ADU sounds like too much of a hassle, you can use the extra space on your lot to provide storage to those who need it. Peer-to-peer self-storage platforms like Neighbor allow you to rent out your additional space to qualified renters looking for a place to store their cars, RVs, or boats. The best part is that Neighbor finds the renters and collects the payment for you. Find out how much you can rent your space for.

FAQ

What is factored into the construction cost? Are there any additional costs besides upfront costs?

Construction costs include the following expenses: permit & fees, site preparation, foundation, utilities, appliances, and the cost of any relevant construction materials. It also includes the labor costs. Depending on the availability of utilities and the state of your land, you may have more expenses. 

Ongoing costs and additional costs might include landscaping, the increased cost of utilities, and any specialized labor. 

Besides the additional rental income, what are the benefits of building a casita on my property?

An ADU can add significant value to your property, which will help you recoup your initial investment. One thing I love about ADUs is that you get the tax benefits of owning and renting a home. Additionally, you can write off the interest of your primary residence and depreciate the ADU, allowing you to keep more of your rental income. 

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