Build vs. Sell

Build an ADU or sell your unused yard: which pays you more?

Both turn your unused yard into real value. Here's how they compare for a typical San Diego homeowner, looking purely at each investment.

What each path is worth per year

Option A

Build an ADU yourself

1,000 sq ft, 2 bed / 2 bath, 100% financed
+$3,700
Net annual benefit
Where the rent goes, per year
Rent collected$42,000
Loan interest−$28,000
Tax, management, vacancy−$10,300
Net to you$3,700
What it asks of you
Upfront cost$400,000
New debt+$400,000
Your RoleHomeowner with Landlord Responsibilities
Yard Maintenance RequiredFull lot with full responsibilities
Option B

Sell your unused yard to Now-Haus

4,000 sq ft of unused yard, $150,000 to you
+$14,600
Net annual benefit
Where the savings come from, per year
Lower mortgage payments$12,600
Lower property tax$2,000
Net to you$14,600
What it asks of you
Upfront cost$0 — you receive $150,000
Mortgage balance reduction$750K → $600K
Your RoleHomeowner only
Yard Maintenance RequiredSmaller lot with less to maintain
Based on this example home
2,000 sq ft
Primary residence
10,000 sq ft
Lot size
$850,000
Purchased 2024, $100K down
$5,985 / mo
Current mortgage payment
$10,900

more each year by selling your unused yard, with no new debt, no construction, and no tenants to manage.

Side by side

What each path asks of you

Build an ADU yourselfSell your unused yard to Now-Haus
Money out of pocketAbout $400,000 to buildNone
DebtAdds a $400,000 loanCuts your mortgage by $150,000
Monthly mortgageUnchanged, plus a new ADU loan payment$1,050 less every month ($5,985 → $4,935)
Annual benefitAbout $3,700About $14,600
Your timeConstruction, then tenants and repairsNow-Haus manages the whole process
Your RiskVacancy, cost overruns, rate changesNone
Your propertyKeep the full lot plus a rental unitSmaller yard, less to maintain

On the numbers alone, selling your unused yard is a much better investment.

See what your yard could do

Every property is different. Now-Haus will evaluate your property and run the real numbers, at no cost to you.

Let us do the math on your property Download the comparison (PDF)

About this example. Illustrative only, not a quote or appraisal; results vary by property. Option B assumes that all sale proceeds go to the mortgage, and that the loan is recast or refinanced to lower the monthly payment (many lenders keep the payment the same after a paydown unless you ask). Tax treatment of the sale depends on your situation; consult a tax advisor. Option A assumes 100% financing at 6.5% interest only and excludes insurance, maintenance, and any added property value. Now-Haus does not provide tax, legal, or financial advice.