Garage Conversion vs. Detached ADU - What’s the Difference?

Accessory Dwelling Units (ADUs) are a growing part of Los Angeles’ housing solution. For homeowners exploring how to add value, income, or flexibility to their property, two options tend to dominate: converting an existing garage or building a new detached unit.

Both are viable. But their differences in scope, permitting, cost, and long-term return are significant. At The Building Solution, we help clients evaluate not just what they want to build, but what their site can actually support. This guide breaks down each approach using 2025 Los Angeles market data and local code requirements.

Cost Comparison: What You’ll Spend and Why

Garage Conversion

Garage conversions typically range from $95,000 to $135,000. The existing footprint, slab, and utility points often reduce costs. However, cost savings depend on the condition of the structure. Many LA garages were built before modern codes and require slab reinforcement, electrical rewiring, or full wall rebuilds.

According to the California HCD, garage conversions are exempt from replacement parking in most zones if the property is within half a mile of public transit. Still, unforeseen structural issues can increase both budget and timeline. Always verify slab integrity, ceiling height, and framing with a licensed contractor early in the process.

Detached ADU

Detached ADUs range from $180,000 to over $300,000, depending on size, location, and site conditions. These are full ground-up builds. They include new foundations, separate utility runs, and full mechanical systems. Typical per-square-foot costs in LA are $300 to $400, though hillside lots or high-end finishes can push costs higher.

Detached units are more expensive, but they support larger floor plans, better natural light, and stronger long-term value. They're often easier to design for privacy and long-term rental use.

Permitting, Zoning, and Fire Access

Garage Conversions

These are typically faster to permit. Under California Government Code §65852.2, conversions do not require replacement parking if located within transit zones. Since they use an existing structure, they are often exempt from standard setbacks. LADBS tends to focus review on structural and energy upgrades rather than site layout.

Detached ADUs

Detached units require fire access clearance per LAFD Section 503.1.1, which mandates a minimum 3- to 4-foot-wide unobstructed path from the street to the ADU entrance. Setback rules also apply generally 4 feet from rear and side property lines. Additional rules may apply in hillside zones or under overlay regulations.

Plan ahead for:

• Easements that may cut through buildable area

• Drainage or slope issues requiring grading

• Minimum separation from the main home (often 6 feet)

• Compliance with both state ADU law and Los Angeles-specific codes

Hidden Traps to Watch For

1. Easements: Utility or drainage easements may prevent construction in key areas. Always check the title report and property survey.

2. Fire Access: Detached ADUs require a continuous, code-compliant path from the street. Narrow side yards or obstructions can block approvals.

3. Garage Code Deficiencies: Garages without permits or built under outdated codes may require full structural retrofits.

4. Parking Replacement: If your lot is not within a transit zone or lies inside a Specific Plan area, LADBS may require a new parking pad or garage replacement.

Always confirm these early in the design process. Assumptions about zoning or structure condition are a leading cause of delay and redesign.

Design Flexibility, Privacy, and Livability

Garage Conversions

Conversions are efficient and fast, often completed in 3 to 5 months. But space is limited most LA garages offer 300 to 400 square feet. That usually results in a studio or small one-bedroom layout.

Privacy and daylight can be limited, especially if the garage is close to the main home or fences. These units work well for guests, students, or mid-term rentals but are less suited for families or high-end tenants.

Detached ADUs

These offer more layout control and design flexibility. Units between 500 and 850 square feet can include multiple bedrooms, vaulted ceilings, and full kitchens. Detached units can be oriented for better light and airflow, and they support outdoor features like private patios or fenced yards.

They also appraise better. According to Freddie Mac, properties with legally permitted detached ADUs see greater resale value increases than those with conversions. In competitive rental markets, that also translates to stronger tenant interest and longer leases.

Rental Income and ROI

Garage Conversions

Rents typically range from $1,800 to $2,400 per month. In West Adams, El Sereno, and parts of the Valley, listings for garage conversions regularly exceed $2,000. With lower build costs, that equates to 18 to 25 percent gross annual returns and breakeven in 4 to 6 years, not including maintenance or vacancy. These units qualify for financing tools like HELOCs and may be eligible for the CalHFA $40,000 predevelopment grant.

Detached ADUs

Detached units command $2,400 to $3,800 per month, and some two-bed units exceed $4,000 in high-demand ZIP codes. They require more capital but offer stronger long-term equity and income.

Here's a simplified snapshot based on typical ranges:

ADU Type	Cost Range	Rent	Annual Income	Payback
Garage Conversion	$95K – $135K	$1,800 – $2,400	$21,600 – $28,800	4–6 years
Detached Studio	$140K – $180K	$2,000 – $2,700	$24,000 – $32,400	5–7 years
Detached 1-Bedroom	$180K – $230K	$2,400 – $3,200	$28,800 – $38,400	5.5–8 years
Detached 2-Bedroom	$240K – $300K	$3,000 – $3,800	$36,000 – $45,600	6.5–8.5 years

Figures are based on May 2025 LA rental data. Actual ROI varies depending on design, loan terms, and vacancy.

Which One Fits Your Site and Goals?

Choose a garage conversion if:

• You need to build quickly and with limited capital

• You plan to house a guest or short-term tenant

• You have a legal, structurally sound garage in place

Choose a detached ADU if:

• You want privacy, layout flexibility, and better long-term returns

• You plan to house extended family or rent full-time

• Your lot can meet setback and fire access requirements

Final Thoughts

There is no one-size-fits-all answer. Both garage conversions and detached ADUs are valuable tools for increasing property utility, but each comes with tradeoffs.

At The Building Solution, we help clients evaluate their site conditions, budget, and long-term goals before committing to design. If you're considering an ADU and want to avoid costly surprises, start with a feasibility review. It’s the best way to align your vision with what your property can support before the real money is spent.