Introducing the NYC ADU ROI Calculator
The number one question we hear from homeowners considering an ADU isn't about zoning or permits. It's simpler than that:
"Is it actually worth it?"
It's a fair question. Building an ADU in New York City is a real investment — typically $100,000 to $300,000 depending on the type and size. Before you commit, you want to know what you'll get back, how long it takes to pay off, and whether the monthly cash flow actually makes sense for your situation.
We built the NYC ADU ROI Calculator to answer exactly that.
What the Calculator Does
The calculator estimates the real financial performance of an ADU rental unit — not a back-of-envelope approximation, but a full model that accounts for:
Monthly rental income — what you expect to charge for the unit
Operating expenses — insurance, water/sewer, property taxes on the ADU, and maintenance
HELOC financing — total project cost, down payment, and interest rate
Net operating income (NOI) — rental income minus operating expenses
Monthly cash flow — what's left after your loan payment
Cash-on-cash return — your annual cash flow as a percentage of your down payment
Payoff timeline — how long it takes to recover the full project cost using monthly cash flow
In other words, it turns a big, fuzzy investment decision into a specific set of numbers you can actually work with.
A Sample Scenario
Let's run a realistic example. Say you own a two-family home in Jamaica, Queens, and you want to convert your detached garage into a rental unit. Here are the inputs:
Monthly rent - $2,200
Insurance - $75/month
Water / sewer - $60/month
Property taxes (ADU portion) - $150/month
Maintenance reserves - $125/month
Total project cost - $155,000
Down payment - 20% ($31,000)
HELOC interest rate - 8.5%
Here’s what the calculator returns:
Net operating income - $1,790/month
HELOC loan amount - $124,000
Monthly interest payment - $878
Monthly Cash Flow - $912
Cash-on-cash return - 35.3%
Time to pay off total project cost - ~14 years
Cash flow of $912 per month on a $31,000 down payment is a 35% cash-on-cash return. For context, the S&P 500 has historically returned around 10% per year. A well-built, wisely-financed ADU outperforms the stock market significantly while also adding lasting value to your property.
What to Do with Your Numbers
The calculator is a starting point, not a final answer. A few things that will shape your real results:
Rent estimates matter most. The difference between $2,000/month and $2,500/month in rent is $6,000/year in NOI — which meaningfully changes your payoff timeline and return. Do your research on comparable rentals in your neighborhood before plugging in a number. We can help with this as part of our free assessment.
Operating expenses are often underestimated. Maintenance reserves in particular — most homeowners skip this field, but real landlords know that units need ongoing upkeep. Budget at least $100–$150/month even for a new build.
Financing terms change everything. An interest-only HELOC at 8.5% vs. 7% is a meaningful difference at $124,000. It's worth shopping lenders before assuming a rate.
The Plus One ADU Program can transform the math. If you qualify for NYC's Plus One ADU Program — which offers up to $395,000 in low- or no-interest financing — your monthly interest cost drops dramatically, and your cash flow improves accordingly. Run the numbers in the calculator with a 0–2% interest rate and see the difference.
How to Get to Real Numbers
The calculator uses the inputs you provide. To get accurate outputs, you need accurate inputs — and that requires knowing your actual project cost and realistic rental income for your specific property and neighborhood.
That's what our free ADU feasibility assessment is for. We'll review your property, tell you what you can build, give you a realistic construction cost estimate, and walk you through current city financing programs. From there, you'll have real numbers to plug into the calculator — not guesses.