How this calculator works
Yearly net = rent × 12 × (1 − vacancy) − yearly costs. Payback = total cost ÷ yearly net. Simple return = yearly net ÷ total cost.
What each input means
| Input | What it is actually asking |
|---|---|
| Total cost | Everything you pay to finish the unit, including financing costs if you borrow. |
| Rent | What a tenant would pay. See ADU rental income. |
| Vacancy | Share of the year the unit is empty between tenants. |
| Yearly costs | What you pay each year because the ADU exists and is rented. Added property tax comes from the ADU property tax calculator. |
Worked examples
Including one where the naive answer misleads, which is the example most calculators leave out.
Low, middle and high rent
Run the same cost with three rents. If payback only looks reasonable at the high rent, the project depends on the best case.
Costs above rent
If yearly costs exceed net rent, the tool says the unit never pays back on these numbers.
What changes the result
Payback moves one for one with cost and inversely with net rent. Vacancy and yearly costs matter more than they look.
When not to use this
Do not use payback alone for a unit that will house family. See is an ADU worth it.
Questions this calculator answers
- What is a typical ADU payback period?
- We publish none; costs and rents vary too widely.
- Does this include loan interest?
- Add interest to the total cost or to yearly costs if you borrow.
- Does it include property value?
- No. See the ADU value calculator.
- Is the return before tax?
- Yes. We give no tax advice.
Sources and methodology
Figures dated 27 October 2026. Last reviewed .
- Fair Market Rents, FY2026 (HUD, retrieved 2026-09-05. Suggested rent benchmark; not shipped as a value.)
Related
- ADU ROI calculator Three rent scenarios.
- Rent estimator Start from HUD FMR.
- ADU loan calculator If you borrow.