You can downsize without moving. Sorry, you will still need to declutter.

How to benefit from your backyard ADU in retirement

7min read
by Olesia Chikunova, ADU Specialist.

Retirement living
70% of people over 65 will need long-term care. The cost of home health care can be $50,000 to $200,000 per year. Hired home care workers through an agency charge $35 per hour or even more. Facility-based care may cost $5,000 to $15,000 per month.
Expect these costs to increase. Two factors weigh in. Demand soars due to the sheer number of baby-boomers. The second factor is the dwindling supply of immigrants working as caregivers.

A backyard ADU, or Accessory Dwelling Unit, is a creative way to address the issue early on.

As an additional benefit, you can live in a downsized home without leaving the area where you have spent your years prior to retirement.

Accessory Dwelling Units are also called in-law or mother-in-law units, carriage houses, and more. It is a stand-alone unit that generally uses the same utility lines as the primary house.

A backyard ADU home is smaller than a typical single-family home, this means it is easy to clean. An ADU is newly constructed, this means it is easy to maintain. It can be custom built, this means it is about you.

1000 SF L shaped backyard home

It offers an alternative method for people who do not wish to move into an apartment building or retirement community. You do not have to look for a new home in a less expensive (but also less familiar) location.

Also, financial planning for retirement living is a lot more convenient with a backyard ADU on your primary property. It can be a source of passive income. Better yet, the main house could be a source of passive income, while you are using the ADU as your main residence.

More towns and cities have started allowing ADUs as the population is growing, and housing shortage remains acute. People are looking forward to having houses closer to where they work. No one enjoys a two hour commute every day. Backyard ADUs allow more density in popular residential areas.

Think: how much do I need for comfortable retirement living?

Look at your numbers, and know that an ADU may resolve your money matters!

Accessory dwelling units are strategic investments, especially when you are planning for retirement living, that help build wealth along with fulfilling housing requirements. Backyard homes are the best option for creating diverse and thriving community on your own property.

Let us have a quick look into the numerous benefits of having a backyard ADU on your property:

  1. It provides housing opportunities while keeping neighborhood character intact. As a sustainable housing option, you can double down on residential areas with existing infrastructure and services.
  2. A home owner will capitalize on the current investment building passive income source and plan for retirement early.
  3. Your family can enjoy multi-generational living on the same property making ADU a family aging-in-place facility for any elderly family members.
  4. You downsize in the community you’ve remained all through the years of life before retirement.
  5. It is small low-maintenance newly constructed living space.
  6. When designed to be a net-zero energy usage house, one can reduce energy bills to $0 during your full retirement age, when the monthly expenses count.
  7. ADUs are expensive, but they are definitely a cheaper option than buying a new home to reside in.

Build an ADU for Retirement Living

It is never too early to think about curating your retirement life style. Intelligent investments and planning for retirement are going to pay off massively after we retire. 

Most people who wish to retire early think about real estate investment in addition to stocks, pension, 401(k), and other golden eggs. You might not be able to afford a new home in the same neighborhood, but this is when a backyard ADU (Accessory Dwelling Unit) can be a game-changer. 

Fun fact: if you are converting a barn, it can be as big as 3000sf, and you can still convert it into an ADU in California!

Olesia Chikunova, ADU Specialist

What do you need to know about granny flats?

Granny flats are also called bonus units, carriage units, casita, and ohana units (in Hawaii).
Cottage for retirement living

“Grandma’s place is not far away from home.” People use granny flat term mostly because it is famous for accommodating aging members. It is located on the same residential lot as the main family house.

There are various types of granny flats.

Detached granny flats are stand-alone units that are separate from the primary house. A plan for granny flat as a detached backyard cottage is a great idea. You may hear them called laneway houses, or DADUs too.

Garage converted granny flats are attached or detached units, depending upon the type of Garage.

Exterior converted granny flats involve transforming a secondary structure. For example, building the unit on top of the Garage or converting a shed or a barn into a dwelling unit. 

Basement Converted granny flats are one of the most efficient conversions possible. But if you are seriously considering using it for people over forty, make sure there are no steps…


Backyard Units - What benefits do they bring?

Pew Research reports that one in 10 U.S. parents with children under the age of 18 are also caring for an aging adult. The national Alliance for Caregiving estimates the number to be at least 11 million.

Make a wise investment for happy retirement and reap the following benefits possible now with plans for granny flats, a.k.a. backyard ADUs.

Brings rental income every month

It’s the panacea for a flexible retirement income. Most people depend on pension plans and forget about passive sources of income for full retirement age. A backyard ADU is also helpful in reaching our financial goals faster, while retirement planning can help pay back all their loans and start collecting savings.

Downsize in style in a backyard home

The age factor will play a significant role after your retirement. You will need a more manageable home. Instead of maintaining a large house, you can just rent your primary house and downsize comfortably into your backyard ADU without leaving the property.

Create flexible living space

Families keep on changing and growing. A backyard ADU  helps in giving each member their own space. Each ADU has its kitchen, separate bathroom, bedroom, living room. They provide plenty of privacy and thus create a happy atmosphere for the family members. It can give space to the caregiver if you may need any in the future enjoying piece of mind in retirement and saving on assisted living costs.

Backyard unit as a cure to the triple problem

Some older people live on fixed income, have old houses, and want to repair for tender age. Downsizing in a backyard ADU can help many older adults to solve this triple problem. ADUs offer more financial freedom with retirement at home.

Mortgage-free life for the lifetime

A beautifully constructed, sleek, and functional ADU can be used as a primary house during retirement age. The main house can be a source of income generation (by renting), meaning mortgage-free life and extra spending power.

Enjoy happy moments forever with a retirement plan laid in advance. Multi-generational living has never been this peaceful!

Need another option?

As your family grows, grown-up children with their own families can reside in the main house rather than shifting to a new bigger home.

At the same time, elderly parents can stay close and be cared for in the ADU. And simultaneously continue to serve their communities and playing an active role.

A backyard cottage allows the elderly to stay close to family without losing their independence and not even making the young ones lose theirs.

See, fulfilling your double goals of downsizing and willful happiness in retirement isn’t that difficult!

Facilities in an ADU

Some granny units are the mini version full-sized homes having complete kitchens. And in other units, there are smaller kitchens with a mini-fridge and small cook top, for those who are not big on cooking. They all need to have cooking facilities though to ensure independent living.

What’s unique about Granny flats for multi-generational families?

Having grandparents live in an ADU allows younger families to thrive. Working parents have the support of elder members instead of incurring expenses on childcare.

Both children and grandparents (mostly with a retirement plan in action) will benefit emotionally and physically from spending time with each other.

Social support

44% of the sandwich generation say the pandemic made it harder to juggle their caregiving responsibilities. Caregivers have personal financial and mental health concerns. They worry about mental health of their loved ones, and on top of that face child care challenges.

Research reveals that having a healthy amount of social contact positively influences the health of elderly members. They can have this privilege while living near their family members and telling their grandchildren bedtime stories every day.

Being around their family or adults also ensures their well-being as they can be monitored easily, and all the medical needs can be met without stress.

The cost of living has been increasing worldwide, which means more expenses for an adult kids who want residential independence. ADU will allow them this privacy at a fraction of the cost.

Sadly many people have lost their jobs in COVID-19 times, which makes it impossible to pay rent. Moving back to the suburban areas to live with relatives and family is a helpful decision by avoiding exhausting their savings.

Multi-generational homes with a backyard ADU allow families, close relatives (retired elderly parents), or extended family to reside harmoniously on the same property for a lifetime.

The most flexible and affordable housing

Currently, the housing market is witnessing a boom, with lots of people interested in re-evaluating their homes to adjust lifestyle according to the COVID pandemic lifestyle.

Backyard ADUs are on the rise as most states are realizing their benefits for homeowners and the communities. Offering a separate living place on the same property, ADU (Accessory Dwelling Unit) provides privacy and separation from the primary home at the same time.

The choice is homeowner’s – whether to use this separate building as more space for adult children, elderly home, retirement planning, or lease it to renters to earn extra income.

Being available on low rent compared to primary property or free of cost for family members, ADUs are undoubtedly an affordable housing option.

Granny flat can be genuinely versatile spaces and will provide so much extra value and opportunity to your family while you enjoy retirement at home.