It can be, but the answer lives in three numbers: the lot, local rents, and your build cost. In the short run an ADU often pencils out to roughly break-even once you finance the construction. The case for building is the long run: your build cost is fixed while rents tend to rise over time, so the unit should add more to cash flow and value the longer you hold. A rough California example: financing around $100,000 of construction (say through a HELOC) might run $600 to $700 a month, and a unit renting for $1,000 to $1,500 can more than cover that, turning slightly positive. Larger builds cost more and shift the math, so run your own numbers with real local rents and contractor bids. Two cautions matter more than the cash flow: - Value is hard to pin down. There's no clean way to pull MLS comps specifically for homes with an ADU, so don't assume dollar-for-dollar payback at resale. - Permitting and structure. If the ADU shares walls or utility meters with the main house, or was built without proper permits, it can block a future refinance and complicate your homeowners insurance. Verify zoning and pull permits before you build or rent it out. On a suitable lot with proper permits and solid local rents, an ADU is often a good long-term play. Confirm the local rules first, since zoning and permitting decide whether it works at all.