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ADU Planning: Practical Tips to Get you Started
If you're considering adding an accessory dwelling unit (ADU) to your property, you're joining thousands of homeowners and investors who are unlocking new value, income potential, and flexibility from their existing real estate. But between the initial spark of inspiration and the moment you hand over the keys to a tenant or family member, there's a critical planning phase that determines whether your ADU becomes a profitable asset or an expensive headache.
This guide walks you through the essential planning decisions that will define your ADU project — from understanding your property's potential to making smart design choices that maximize space, privacy, and long-term value. Whether you're planning an ADU for rental income, multigenerational living, or future resale value, the concepts outlined here will help you move confidently from idea to execution.
Understanding Your Property's Build Potential
Before you start sketching floor plans or browsing ADU designs, you need to know exactly how much you can build. Every property has what's called a "buildable envelope" — the physical area where structures are legally allowed. This envelope is shaped by local zoning regulations, and understanding these rules upfront will save you from costly redesigns down the road.
When planning an ADU, start by researching your city's specific zoning and building codes. These regulations vary significantly between municipalities, and even between neighborhoods within the same city. Here are the key factors that will influence what you can build:
Setbacks are buffer zones where you can't build—the required distance between your ADU and property lines. In Denver, you typically need 5 feet from the sides and 15 feet from the rear for detached ADUs, but every city is different. Here's the math: on a standard 50' x 100' lot with those setbacks, you lose 30% of your buildable area right away. Corner lots have it worse—bigger setbacks because you're dealing with two street-facing sides. Some cities also increase setbacks based on your ADU's height, so a two-story unit might need more distance than a single-story.
Lot coverage limits how much of your lot can be covered by buildings—usually 40-45% in Denver. The catch? That includes your main house. If your house already takes up 1,800 square feet on a 5,000 square foot lot with a 45% limit, you've only got 450 square feet of footprint left for an ADU. This is why conversions (no added coverage) or attached ADUs (shared footprint) sometimes make more sense.
Height limits cap ADUs at 20-24 feet in most Colorado residential zones—roughly one and a half to two stories. This matters because vaulted ceilings and lofts need vertical space. On sloped lots, where cities measure height from can cost you a whole floor.
Utility easements are areas where the city has rights to underground lines. Build over one and you could be forced to move your ADU at your own expense. Get a survey ($400-800) before designing anything—it'll show you exactly where you can and can't build.
If you're in Colorado, refer to your local planning department — for example, Denver's Community Planning & Development Department or Boulder's Planning & Zoning Division — for setback maps and ADU feasibility tools. Many cities now offer online zoning lookup tools that can give you preliminary answers within minutes
Types of ADUs: Choosing the Right Configuration
One of the most fundamental decisions in ADU planning is determining which type of structure makes the most sense for your property, budget, and goals. While there are many variations of ADUs, most fall into three primary categories, each with distinct advantages and considerations.
Detached ADUs:
A separate building in your backyard with its own foundation, utilities, and entrance. These cost the most to build but also command the highest rents—typically 15-20% more than attached units. Tenants pay more for real privacy. They also add the most to resale value. The downside: longer build times and you need decent backyard space after setbacks.
Attached ADUs:
Shares a wall with your house but has its own entrance. Cheaper than detached because you're sharing infrastructure—tying into existing utilities. These work well on narrow urban lots where detached isn't possible. The trade-off: less privacy and you'll hear each other through walls even with good insulation.
Garage or Basement Conversions:
Converting existing space is the most affordable option and can be done in the shortest timeframe. One Boulder client converted their detached garage and now rents it out successfully.
The catch: ceiling height is the killer. Code requires minimum heights and most basements don't make it without excavation. You'll also need proper egress windows and enough natural light. Conversions work great if you have a detached garage with good bones. Dark, low-ceiling basements? Building new might actually cost less once you factor in all the digging and window work.
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Space Efficiency Principles: Making Every Square Foot Count
ADU design lives and dies by how well it uses space. Even a 400-square-foot unit can feel generous if it's thoughtfully designed, while a poorly planned 600-square-foot unit can feel cramped. The difference comes down to understanding a few core principles of efficient spatial design.
Go vertical: High ceilings change everything. Nine or ten-foot ceilings instead of eight feet make a room feel twice as big, and it only adds a few thousand dollars to construction. If your height limits allow it, vaulted ceilings in the main living area are worth every penny. We also use tall storage units—floor to ceiling cabinets instead of standard ones—because they pull your eye up and make the space feel taller.
Cut out hallways. Every foot of hallway is wasted space. In a 500 square foot ADU, a three-foot hallway eats up 20-30 square feet you could use for actual living. Use pocket doors or barn doors that slide instead of swing. Keep sightlines open. One of our recent projects eliminated a short hallway and used that space to expand the kitchen from a galley to an L-shape. Made a huge difference in how the place feels.
Open concept usually wins. For anything under 600 square feet, open floor plans almost always feel better than chopped-up ones. You want zones, not rooms. Use your furniture, rugs, maybe a half-wall to define the kitchen from the living area, but don't close everything off. The exception: if you're doing a true one-bedroom and privacy matters, then yeah, put up a wall for the bedroom. But the rest should flow.
Light makes space. This is the cheapest way to make a place feel bigger. Big windows, glass doors, skylights—they don't just brighten things up, they make the walls feel less like boundaries. If you can put a sliding glass door that opens to even a tiny patio, do it. Makes the outdoor space feel like part of the ADU. And if you're tight on budget but need more light, a skylight over the kitchen or living area runs $1,500-3,000 and completely transforms dark spaces.
Privacy and Placement: Creating an Independent Living Space
When adding a second dwelling on your lot, you're creating a delicate balance. Your ADU should feel like an independent home, not an afterthought tucked into a corner. At the same time, it shouldn't dominate your property or compromise your own privacy.
When you're adding a second dwelling on your lot, you're trying to create independence without things getting weird. Your ADU should feel like its own place, not an afterthought shoved in a corner. At the same time, you don't want it dominating your yard or staring into your living room.
Give the ADU its own entrance. This seems obvious but it matters more than people think. If your tenant or family member has to walk past your kitchen window every time they come home, it's awkward for everyone. Side-yard gates work great if you have the space. In Denver neighborhoods with alleys, rear access is perfect. Even just a separate path that doesn't cut through your main outdoor area makes a difference.
Think about where windows face. You don't want the ADU's living room looking directly into your kitchen, and vice versa. Angle windows toward landscaping, the sky, or your side yard instead of straight at your neighbor's windows or your own house. High windows near the ceiling (clerestory windows) are great for bathrooms and bedrooms—they let in light but you can't see through them.
Sound matters as much as sight. This is especially true for attached ADUs. You'll hear each other even with decent insulation, so think about what rooms share walls. Use good insulation in shared walls (Rockwool is worth the extra money), solid-core doors, and definitely separate HVAC systems. Sharing heating and cooling means hearing each other's noise through the vents.
Outdoor space needs some definition. Even on smaller lots, giving the ADU a designated outdoor area—even if it's just 80 or 100 square feet—makes everyone happier. A small patio or deck with some kind of visual separation, whether that's a fence, a privacy screen, or landscaping. This doesn't have to be extreme, but "we share the whole backyard" usually doesn't work as well as you'd hope. People like knowing what space is theirs.
Smart Investor Tips: Designing for Returns
If you're planning an ADU as an investment property or with future rental income in mind, certain design decisions can significantly impact your returns. These choices aren't necessarily more expensive — they're just more strategic
- Include a full kitchen: Even a compact one. It turns a "studio" into a true dwelling unit and dramatically expands your potential tenant pool.
- Incorporate storage cleverly: Tenants value function over finishes. Built-in storage, even simple shelving, increases perceived value.
- Design for dual-use: An ADU designed for rental today might serve family needs tomorrow. Keep layouts flexible and avoid overly specific design choices.
- Go energy efficient: Lower utility bills attract long-term tenants and boost resale. Well-insulated walls, efficient HVAC, and good windows pay for themselves.
When working with ADU builders, communicate your investment goals clearly. Experienced builders can suggest value-engineering opportunities — places where you can reduce costs without compromising quality or rental appeal. For example, a simpler roofline can cut thousands from construction costs with no impact on livability.
Design Red Flags to Avoid
Even well-intentioned ADU plans can go sideways if you're not careful. Here are the most common design mistakes that undermine both livability and code compliance:
Complex rooflines. Roofs with lots of angles, peaks, and little protruding sections look cool in drawings but add major costs without making the space more livable. Stick with simple roofs that just slope in one or two directions—they're cheaper, easier to build, and shed water better.
Ignoring setbacks early. Don't fall in love with a design before checking if it actually fits on your lot. Measure setbacks on day one, not after you've paid for plans. Otherwise you're looking at redesign fees and permit delays.
Bad window placement. Too few makes it dark and hard to rent. Too many costs more and kills privacy. Windows facing the wrong direction miss good views and stare at fences. Think strategically about light, views, and privacy—quality over quantity.
Cramming in too many rooms. A 600 sq ft two-bedroom sounds good until you realize it means two tiny bedrooms and no living space. Tenants would rather have a generous one-bedroom than a cramped two. Give spaces room to breathe.
Forgetting storage and parking. Without adequate storage, tenants pile stuff on patios and in yards. And even though some cities waive parking requirements near transit, tenants still have cars. Include parking if you can—it expands who can rent from you.
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The ELMNTL Design Process:
At ELMNTL, we've refined our ADU design process to balance creativity with practicality. We know that great design isn't just about aesthetics — it's about creating spaces that work for real people, on real budgets, in real neighborhoods.
Our process begins with understanding your "why" — what this ADU needs to accomplish for you. From there, we assess your site's specific constraints and opportunities, working within local codes while maximizing your buildable area. We help you select the right ADU type for your goals, then craft ADU plans that optimize space efficiency, privacy, and long-term value.
Throughout the design phase, we maintain close collaboration with our construction team. This integration ensures that your ADU design isn't just beautiful on paper — it's buildable, permitted, and delivered on schedule.
Getting Started with Your ADU Plans
Planning an ADU doesn't have to be overwhelming. Break it down into clear phases: assess your property's potential, choose your ADU type, refine the design with efficiency and privacy in mind, and partner with experienced ADU builders who understand both the creative and regulatory sides of the equation.
The most successful ADU projects are those that start with clear intentions and realistic expectations. Know your budget, understand your goals, and don't rush the planning phase. The time you invest upfront in thoughtful ADU design will pay dividends in construction efficiency, tenant satisfaction, and long-term property value.
