Should I Turn My Basement into an ADU or just Finish It?

Great Question! I'm actually working on a personal project right now where I decided not to permit the new basement as an ADU and instead permit an ADU-ready space that I can change later.

The biggest questions you need to ask yourself are 1) what do I want to use the space for, and 2) what does my city/county allow and how hard/expensive is it to get permits?

Option 1: Create a basement ADU
This is a good option if it's clear that you want a separate living space that will probably be used as a full-time rental. The biggest difference between a basement ADU and a finished basement is that it has a separate address and a full kitchen. If you want to have a full time renter in your basement, an ADU is a good way to go. 

Option 2: Finish my basement
If you're looking to Airbnb, then an ADU isn't necessary. And in fact, in some cities like Portland, OR, you're better off short-term renting a basement with bedroom(s) than an ADU because the city charges you much more for the permit if that is your plan. To have a nice short-term rental, you don't need a full kitchen. A sink, small fridge, and microwave is usually sufficient for guests.

In my case, I like to have options so ADUs have seemed like the way to go. Who knows what will happen with the short-term market and it's great to have the ability to put a long-term renter in the space. Plus, if you're spending all that money, you might as well spend a little more and give yourself more options and potentially create more value for your house.

​However, like I mentioned above, for my most recent project, I'm designing the basement to ADU code, but not getting the permit yet because in Portland, they restrict the use of ADUs for short-term unless you pay a significant price. If the time comes when I want to change the status to that of an ADU, I can show the plans I used to permit the basement work, add a 220 outlet and stove, pay the permit fees, and we're done.

Lots of things to consider, but if you're asking the right questions, the right answer will surface.

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