Build cost
Financing
Income
Operating costs
Horizon and value
Value uplift is the least certain input. Leave it at 0 for a rent-only result, or use an appraiser's or agent's estimate for your market.
Fill in the build cost lines, then click Calculate.
Result
Year by year
| Year | Rent collected | Operating costs | Debt service | Cash after debt | Cumulative cash |
|---|
If rent is different
| Change | Monthly rent | Year-1 cash | Equity IRR | NPV |
|---|
If the build costs more or less
| Change | Total cost | Year-1 cash | Equity IRR | NPV |
|---|
How it is calculated
Cost: cost lines plus the contingency percentage. Loan: the financed share, level monthly payment over the term; your equity is the rest. Each year: rent (grown yearly) less owner-use months, less vacancy, less management, less operating costs (grown yearly), less the loan payments. Yield on cost: year-1 income after operating costs, before debt, over total cost. Simple payback: years until that income repays the whole cost, ignoring financing and sale. IRR and NPV: on your cash: equity out at the start, yearly cash after debt, and at the end the value uplift grown at the appreciation rate, less selling costs and the loan balance.
Not modelled: income and capital-gains tax, depreciation and recapture, property-tax reassessment beyond the line you enter, local rent and short-term-rental rules, permitting risk and cost overruns beyond the contingency, interest-only or construction-loan phases, the build period itself, and what the space is worth to you if you use it. Sample numbers are invented. Unverified: tested on hand-calculated examples, not on a real project. It computes returns from your inputs; it does not tell you whether to build.
Common questions
Is an ADU worth building?
It depends on four numbers: what it costs all-in, what you can rent it for after vacancy and operating costs, what the loan costs, and how much value it adds when you sell. The tool puts them in one projection and reports year-1 cash flow, the yield on the build cost, how many years until the unit has repaid its cost, and the return on your own cash (IRR and NPV) over the period you expect to hold it. A unit costing $220,000 that nets $23,800 a year before debt has a yield on cost of about 10.8 percent and a simple payback near eight years, before any value uplift.
What does an ADU cost to build?
Costs vary widely by city, site, size and whether it is detached, attached or a garage conversion, so the tool ships no cost figure as fact. Enter each line from your quotes: design and engineering, permits and impact fees, utility connections, foundation and framing, systems and finishes, and site work. A contingency percentage is added on top; ten percent is a common planning allowance, but use what your builder suggests.
How do I estimate ADU rental income?
Use rents for comparable units in your area from current listings, not the highest you have seen. The tool then applies a vacancy percentage, an optional property-management fee, and annual rent growth. If a family member or you will use the unit part of the year, enter those months and the rent for them is removed. Enter the rent you actually expect to collect, not the asking price.
What is the break-even rent?
Two numbers are shown. The cash break-even rent is the monthly rent at which year-1 income after vacancy and operating costs just covers the loan payment. The return break-even rent is the monthly rent at which the equity NPV at your discount rate over the hold period is zero, so any rent above it beats that rate on your figures.
Should I count the added home value?
That is the biggest and least certain input. An ADU can raise an appraisal, but the uplift is often at or below what it cost, and it depends on your market and the appraiser. Leave it at zero to see a rent-only result, or enter an estimate from a local appraiser or agent. The tool grows it at your appreciation rate, subtracts selling costs and the remaining loan, and counts the net as cash at the end of the hold period.
How are IRR and NPV calculated?
Your cash invested (build cost minus the loan) is a cash outflow at the start. Each year's rent after vacancy and operating costs, less loan payments, is an inflow, and the net sale proceeds are added in the final year. IRR is the yearly rate that makes the present value of those flows zero, found by bisection; NPV discounts the same flows at the rate you enter. If the flows never change sign, for example an all-cash build with no uplift that never repays, IRR is shown as n/a.
Is my information uploaded?
No. The calculation runs in your browser from figures you type, nothing is sent to a server, there are no accounts, and it works offline after the page loads. No address or personal information is asked for.