Is an ADU Worth It in NYC? ROI and Long-Term Value Explained

When you start planning an ADU, you might wonder - how will this pay off in the long run? There are several factors to consider when deciding if a new accessory dwelling unit will be worth your time (and money).

What’s Your Real Return on Investment?

Let’s run a simple example.

Say you spend $200,000 to build a small, fully compliant one-bedroom ADU in Brooklyn or Queens - a realistic mid-range cost for 2025. If you rent it out for $2,500 per month (a conservative estimate for a legal one-bedroom in a decent NYC neighborhood), that’s $30,000 per year in rental income.

After factoring in property taxes, insurance, maintenance, and vacancy expenses allowance, you’d net roughly $25,500 per year. Divide your total investment by your annual net income - $200,000 ÷ $25,500 ≈ 7.8 years - to get your estimated payback period.

That means you could recover your initial investment in under eight years. After that, the income becomes pure profit or can help offset your own housing costs if used for family. Compared to the average annual stock market return of 7–10%, an ADU begins to look like a solid, tangible investment - one that builds long-term equity instead of fluctuating with the market. And the best part? You still own the land. Your ADU won’t vanish with market swings - it’s sitting on real property in one top real estate cities in the world.

The Hidden Financial Perks

An ADU in NYC can provide returns in ways you might not have considered, including:

✅ Increased Property Value

Well-designed, high-quality ADUs can boost property value - depending on location.

✅ Multigenerational Living, Minus the Drama
If parents or adult children live with you, an ADU allows privacy while keeping care and connection close - potentially saving $3,000–$6,000/month versus assisted living or renting elsewhere.

Who Benefits?

An ADU can benefit many types of New Yorkers:

• Single-family homeowners in areas where zoning permits (e.g., portions of Queens, Staten Island, or outer Brooklyn)

• People with unused space - a basement, garage, or large backyard

• Owners planning to stay long-term

The Verdict: Yes - If You Play It Smart

Are ADUs worth it in NYC? Yes, but do your homework. Get a feasibility study, and consult an architect familiar with NYC’s ADU regulations to ensure your project complies and brings your true vision to reality.