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A complete breakdown of what Denver Metro homeowners can expect to invest in an accessory dwelling unit in 2026 — by ADU type, with all cost factors explained.
The most important factor in your ADU budget is which type of unit you build. Detached backyard cottages typically run $200,000–$400,000. Above-garage ADUs run $120,000–$300,000. Garage conversions run $50,000–$150,000. Basement conversions run $40,000–$120,000.
A detached ADU is a brand-new standalone structure built from the ground up in your backyard. It requires a new foundation, utility connections, and full construction from framing through finishes. Most Denver Metro homeowners building a detached ADU land somewhere in the $250,000 to $350,000 range.
Converting an existing garage is significantly less expensive than new construction because the structural shell already exists. Primary costs are interior buildout: insulation, drywall, flooring, plumbing, electrical, HVAC, a kitchen, and a bathroom.
If your home has a walkout basement — common in Denver Metro — a basement ADU conversion is often the most affordable path. Key costs include a separate entrance, kitchen and bathroom, egress windows, radon mitigation, and sound insulation.
Site conditions (slopes, utility distance, access), finishes and fixtures (standard vs. premium), permit and utility connection fees ($3,000–$20,000+), and unit size all affect the final number. Smaller ADUs have a higher cost per square foot because certain fixed costs exist regardless of size.
ADUs generally increase property value by 20–35% according to industry estimates. In the Denver Metro market, where the average home commands nearly $580,000, a conservative 20% increase often represents over $100,000 in added equity — frequently more than half the project cost.
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