Building an ADU for Rental Income in Asheville, NC
Smart Investment, Big Returns—Here’s How to Make It Work
In a city like Asheville, where housing demand is high and space is at a premium, building an Accessory Dwelling Unit (ADU) can be one of the smartest moves a homeowner can make—especially if you're looking to generate rental income.
At Third Eye Builders, we’ve helped Asheville homeowners unlock the hidden potential of their properties through high-quality, code-compliant ADUs. Whether you're dreaming of a cozy guest cottage, a modern rental studio, or a flexible multi-use space, here’s everything you need to know.
What’s an ADU?
An ADU is a self-contained living unit located on the same property as a primary residence. It includes:
A private entrance
Kitchen and bathroom
Sleeping and living space
Connection to utilities (or separate meters, depending on the setup)
They come in several forms:
Detached ADU (separate structure in the backyard)
Attached ADU (added to the main house or garage)
Converted space (basement, attic, or garage transformed into a livable unit)
Why Build an ADU for Rental Income?
Here’s why Asheville homeowners are jumping on the ADU trend:
1. Steady Passive Income
Renting out an ADU as a long-term rental (30+ days) provides consistent monthly income—often enough to offset a large portion of your mortgage or fund future home improvements.
2. Increasing Property Value
Adding legal, livable square footage increases your home's resale value. Buyers are increasingly looking for homes with built-in income potential.
3. Tax Advantages
ADUs may offer tax benefits such as depreciation, deductions for expenses, and potential homestead exemptions (check with your CPA or tax advisor).
4. Flexibility Over Time
You can rent it now, and later use it for family, guests, home offices, or aging-in-place solutions.
Asheville-Specific Rules & Considerations
ADUs Are Legal in Asheville
The city allows ADUs by-right on most residential lots with a primary dwelling—so long as you follow certain zoning and design rules.
Key Regulations:
Size Limit: Up to 70% of the main house’s size, capped at 800–1000 sq ft depending on whether the ADU is attached or detached.
Zoning: Your property must be in a qualifying zoning district (R-1, R-2, RS-8, etc.)
Short-Term Rentals: Most ADUs cannot be used for Airbnb or vacation rentals unless you're in a specifically zoned short-term rental district. Stick to long-term rentals (30+ days) to stay compliant.
Parking: In many cases, no additional parking is required, but this depends on zoning and lot size.
Permits Required: Yes—both building permits and possible Historic Review if your property is in a designated district.
Potential Rental Income in Asheville
Here’s what long-term rental income from an ADU might look like (based on local data):
Studio / 1 Bed: $1,200 – $1,800 (Varies by location and finish quality)
2-Bed ADU: $1,800 – $2,500+ (Ideal for families or working professionals)
Basement Apartment: $1,000 – $1,600 (Often more affordable to build if space is already enclosed)
Pro Tip: High-quality finishes and thoughtful design command higher rents—and attract longer-term tenants.
Third Eye Builders: Your ADU Partner in Asheville
Here’s how Third Eye Builders makes your rental ADU project easy:
We confirm your property’s eligibility
Design a layout that balances beauty and ROI
Handle all permitting, inspections, and code compliance
Build to high-quality standards with efficient project timelines
Help you prepare your unit for renters—legally and practically
Whether it’s your first investment property or a creative way to make your home work harder for you, we’re the Asheville ADU experts who can guide you from start to finish.
Ready to Build Income into Your Backyard?
Let’s turn your backyard, basement, or garage into a beautiful, income-producing space.