What Is a Mother-in-Law Suite? (Costs & Benefits)CASAPLORERTrusted & Transparent
In recent years, intergenerational living, where one household includes not just the main family, but also parents, in-laws, or adult children, has become more and more common. The trend requires a unique type of property or building where every person accommodated can have some space and privacy. Mother-in-law suites can provide for this.
What You Should Know
- A mother-in-law suite is a separate living area within a house or property
- Mother-in-law suites can be used to home aging parents, adult children, and long-term guests. They can be used as a home office or even as rental units
- Mother-in-law suites can be built within the house by converting an already-existing area, detached from the house completely, or attached to the sides of it
- The cost of a mother-in-law suite depends on how it is built, and what you include in it
- The value of a house is typically higher if it includes a mother-in-law suite
- To finance a mother-in-law suite, one can use home improvement loans such asHELOCs and home equity loans, cash-out refinancing, or construction loans
What is a Mother-In-Law Suite?
A mother-in-law suite is a separate living area within a house or property. The simplest mother-in-law suite would typically include a bedroom and bathroom. However, it is not uncommon for them to even include a kitchen, a small living space, and a separate entrance. There are some that also have a separate garage.
Mother-in-law suites can be inside the house. This is typically the case where a part of the house is renovated and turned into a private living area. They can be added to the main structure of the house or they can even be a completely detached unit.
The purpose of mother-in-law suites is to give its occupant a feeling of privacy and comfort, where he or she can live even without accessing the main area of the house. Mother-in-law suites are typically used to home aging parents, long-term guests, or adult children. However, others can also use these suites to rent them out.
In legal terms, a mother-in-law suite is also called an accessory dwelling unit or ADU when it is a completely independent unit from the main house, but on the same property.
Benefits of a Mother-In-Law Suite
A mother-in-law suite has several benefits that mostly relate to its multifunctionality. Below we will explore the potential uses that this space has and how you can utilize the area when your relatives are not occupying it.
- Housing for Parents, Adult Children, Guests, or Others
Parents or in-laws - Housing parents or in-laws in a mother-in-law suite can be a good way of having them close to you, while still enjoying your separate living spaces. Besides that, you will get to save on the cost of buying or owning another house or the expenses of housing them in senior living facilities. Moreover, by having your parents live with you, they can get the help and emotional support they need as they grow older while still being somewhat independent.
Mother-in-law suites provide everyone in the family with the space they need to be close to one another, yet in separate living areas. Keep in mind that if you plan to renovate your home in order to create a mother-in-law suite for older relatives, make sure to plan out the area and its design to fit the health problems an aging relative could have. For example, it would not be as convenient if they had to climb up the stairs to get to their room.
Adult children - With housing prices on the rise, younger generations are finding it more difficult to afford to purchase a house of their own. This is one of the main reasons that many have chosen to stay in their parents’ nest even in their adulthood. To accommodate adult children who need their own space and privacy, a lot of families renovate their basements or attics to create a mother-in-law suite. Living with their family for a longer period of time can also give the person a chance to save for a down payment by not spending that money on rent.
Guests - A mother-in-law suite is far more comfortable and convenient for guests than a simple guest bedroom. The characteristics of a typical mother-in-law suite offer more space and privacy to a guest who is planning to stay for the long term. If you are someone who has guests over often, you can benefit from having separate spaces for yourself and for them.
Live-in Nanny - A mother-in-law suite can be a great accommodation for a live-in nanny who gets their own living space where they can work, relax, and even cook in. The rising costs of childcare have made live-in nannies a more preferred option than before. Moreover, it is a great alternative for busy parents who constantly need to have someone to look after their child.
- Rental Income
If you don’t have any relatives occupying your mother-in-law suite, you can earn some money by renting the mother-in-law suite out. Many owners choose to either rent the unit to long-term tenants or by listing it on platforms such as Airbnb for people looking for short-term accommodation. Since mother-in-law suites typically have a separate entrance, you and your tenants can have some privacy while living under the same roof. There are however regulations behind using this part of the property for rental income, which you will have to take into account.
- Home office
A mother-in-law suite can serve as a home office for people who work remotely or take some of their work home. It is the perfect way to separate your home life from work life and give you the space you need to work without being interrupted by others. A home office is a great solution for small business owners or professionals such as real estate agents who have flexible working hours. Designing your mother-in-law suite as a home office can also give you the opportunity to invite clients home. Moreover, if you construct your mother-in-law suite as a working station, you don’t have to install a kitchen in it, which is one of the most expensive parts of the suite.
- Extra storage room
When your mother-in-law suite is not occupied by guests, it can serve as an area where you can store things for which you do not have space in the house, or that you want to be out of children’s reach. For example, you can use the closets to store some of the clothes you don’t wear anymore or the bathroom to store cleaning supplies and detergents.
- Added Value to the House
If you later decide to sell the house, you will likely be compensated for the cost of renovations of building a mother-in-law suite. Depending on whether the unit is built within the existing house or if it is an added unit that increases the house’s square footage, the value shall increase accordingly.
Drawbacks of a Mother-in-Law Suite
While there are a ton of ways that you can use a mother-in-law suite, the cost to build it, maintain it and the local regulations on it might not make it worthwhile for some.
First, depending on how and where the mother-in-law suite is built, the cost of the project will be determined. For example, if you choose to build a completely separate unit from the house, the cost will be much higher than renovating a part of the house. Apart from other construction costs, a detached unit will need to be connected to the electrical and plumbing system, which is harder and more expensive compared to a unit within the main house.
Even renovating existing parts of the house can be pretty expensive. For example, you can convert your basement into a mother-in-law suite. However, if your basement is unfinished, the cost to finish it typically ranges from $10,000 to $35,000.
Moreover, since a mother-in-law suite is typically designed so the occupant can have all the necessities they need, they will usually include a bathroom and a kitchen. Therefore, even if you design a small mother-in-law suite, the appliances required for the kitchen and bathroom fixtures substantially increase the cost of this space. Kitchen appliances packages can range approximately from $2,000 to $20,000, while the cost of a relatively small bathroom can go up to $15,000.
- Zoning issues and restrictions
Before you invest in building a mother-in-law suite, make sure that accessory dwelling units are permitted in your area. City and municipality regulations, including zoning laws and building codes, exist that can restrict how you build a mother-in-law suite and what you can use it for. For example, there are additional restrictions if you are planning to build the suite detached from the main house or if you want to rent it out to tenants.
While there are usually no size requirements for an ADU created from a converted space, if you plan to make an addition to the house, some jurisdictions may not allow adding more than 850 square feet for one or fewer rooms. You will also probably have to get a building permit.
Moreover, there might be restrictions on what you are allowed to add to your ADU. For example, some places do not permit having kitchens inside an ADU because of the fire hazard it presents. Therefore, it is important to do your research before you start building.
If you plan to increase the size of the house to build a mother-in-law suite, your homeowners insurance plan might have to be adjusted to account for the additional space. You might have to do this even if you rent out the mother-in-law suite since now you are using the house for another purpose.
- High utility and maintenance costs
If the suite includes a kitchen and bathroom, your utility bill will increase to account for the electricity, gas, and water that the occupant of the mother-in-law suite is using. This can be a significant cost if the ADU is a completely separate unit and not a converted area of the existing house. You will also have to spend money, time, and energy on maintaining the mother-in-law suite and performing repairs as needed.
Types of Mother-in-Law Suites
There are different ways of how you can build a mother-in-law suite within your house or property. These ways include either having it as an internal part of the house by converting another area, making house additions, or building a completely detached unit.
Attached - If the mother-in-law suite is built as an attached part of the house, the structure will have its own foundations while sharing a wall with the main house. Therefore, it is considered as part of the same building, not separate. The cost of building an attached ADU is typically lower than a detached one.
Detached - If you choose to build the mother-in-law suite as a detached unit, then the structure will be completely separate from the main house. That being said, it will have its own foundations, but it will not be sharing any walls with the main house. Another type of detached unit is a granny pod.
Converting the basement - Some people choose to convert an internal part of their existing house into a mother-in-law suite in order to make that part of the house more useful. A common area to use is the basement, especially when this is a walk-out basement, allowing for a separate entrance. However, if the basement is unfinished, there will be substantial costs to converting it into a mother-in-law suite.
Converting the garage - The garage is also a common area to turn into a mother-in-law suite. Depending on the size of the garage, you can have a bedroom, bathroom, and kitchen built inside of it. Another advantage of converting a garage is that you have the opportunity to make an addition to the structure if you want more space.
Converting the attic - Some choose to build the mother-in-law suite in their attic. While this is a good way to utilize the area, it might not be convenient if you are planning to house aging parents in it, since they would have to climb stairs to get to it. Also, an attic does not allow for a separate entrance. However, if you plan to use it for short-term guests, adult children, or as a home office, converting the attic can be a good alternative as well.
How Much Does It Cost to Build a Mother-in-Law Suite?
The cost to build a mother-in-law suite will depend on which type of suite you choose. For example, making additions to the house or having a completely separate unit might come at higher costs than converting an existing part of the house. However, some parts such as the attic can have higher costs as well. This is because of the challenges the area presents, such as extending the plumbing system to reach the attic.
The total cost will also depend on what you choose to include in the mother-in-law suite. For example, a kitchen can be a substantial cost to the whole project. Moreover, there are other expenses such as the costs of architectural services, electricians, and plumbers.
The table below lists the average costs of each type of mother-in-law suite.
|Attached||$32,700 - $63,000|
|Detached (Granny Pod)||$85,000 - $125,000|
|Basement||$10,000 - $27,000|
|Garage||$20,000 - $50,000 (+$15,000 to $25,000 for a bathroom)|
|Attic||$41,400 - $90,000|
How Much Value Does a Mother-in-Law Suite Add to the House?
If the mother-in-law suite is an attached or detached unit of the house, then the value of the house would approximately increase by the square footage of the area added. For example, the average price per square foot in the U.S. is currently around $123. This means that adding an area of 700 square feet would increase your house’s value by $86,100.
The value would also increase depending on the bathrooms and kitchens added. Therefore, it is certain that building a mother-in-law suite increases the value of your home. However, the question that needs to be answered is whether the value increase justifies the cost of building it. Asking for a real estate agent’s opinion on the value increase would be a good idea since they have more knowledge on the market demand for homes including a mother-in-law suite and how much more buyers are willing to pay for it.
How Can I Finance a Mother-in-Law Suite?
With a home-equity line of credit, you can borrow against the equity you have already built in your home. This means that your home equity is used as collateral. To qualify for a HELOC you need to have at least 20% equity in your home and a credit scoregreater than 620. A HELOC acts as a line of credit from which you can borrow to pay for large expenses such as building a mother-in-law suite. Moreover, HELOCs require you to make interest-only payments initially.
Home Equity Loan
Home equity loans are very similar to HELOCs in the way that you can borrow money against your home’s equity. However, with a home equity loan, you would borrow a lump sum rather than borrow funds as needed from a line of credit. Moreover, while HELOCs let one make interest-only payments initially, with a home equity loan you are required to make monthly paymentsconsisting of the principal and interest, similar to a regular mortgage.
If you already have an existing mortgage on the house, you can replace it with a bigger mortgage and get the difference in cash. This process is called cash-out refinancing. If interest rates are low, you should definitely consider this option to finance your mother-in-law suite as you would be getting better terms on your mortgage.
While construction loansare intended to be used for building a house from the ground up, they can also be a way to finance some types of mother-in-law suites. With a construction loan, the lender gives the funds to the contractor in phases, and the borrower can make interest-only payments until the project is finished. After you have built your mother-in-law suite, you can either pay the loan in full or you can refinance it into a mortgage. Because of the requirements needed for a construction loan by the lender, this may not be the best option for financing your mother-in-law suite.