Believe it or not, building a guest house will add instant equity to your property which means you can likely add $50 to $100 per square foot to your asking price when you sell.
For many, the price of building and extra structure on their property is well worth it in the end. Beyond the return on their investment, they will have plenty of extra space that can save them money in renting an extra apartment.
Or they can rent out the space and earn a passive income they can count on.
Yet what is the cost to build a casita or guest house, and are there other expenses you should be thinking about?
Let’s take a look.
What is a Casita?
The word “casita” literally translates to “little house.”
They are detached structures on the main property of a home where members of the household are already living.
A casita may also be known as a mother-in-law suite, carriage house, or guest house.
Many guesthouses come with a small bathroom or kitchenette.
This makes them well-suited for use by an in-law who wants to remain independent but would benefit from having family close by.
Casitas are guest homes that are usually associated with Spanish-Mediterranean aesthetics.
They are popular in the greater Phoenix area.
Recent years have seen upgrades like built-in shelving, skylights, and vaulted ceiling, all of which make the space seem larger and more welcoming.
What Are Some Casita Benefits?
One of the main benefits of building a casita is cost-effectiveness.
It costs much less than renting out a separate apartment because it makes use of the same electrical and plumbing systems that are already serving the rest of the house.
This also makes them kinder to the environment.
Casitas are also quite flexible and can adapt to your needs as your family changes.
For example, you may have a college-aged child now who would like a separate dwelling when they come home for breaks.
In the future, you could convert the space into an in-law suite or studio.
Some individuals like to use their dwelling as a separate home office.
In these days of remote work, it helps to have a quiet spot to escape to if you are part of a busy household.
Others may utilize it as an art studio, dance space, or workout room.
Still, others seek to capitalize on their investment by renting out the casita on a vacation rental website or gaining passive income from regular renters.
You’ll have to check with your municipality first to see what is allowed.
Yet many find that they get their money back as well as turn a profit by renting out the space to those who need a quiet, efficient place to live.
Casitas are wonderful entry-level housing options for young people, as well as excellent options for seniors.
Those who need multi-generational housing in the greater Phoenix area can really benefit from them.
What is the Cost to Build a Casita or Guest House?
The average cost to build a 15 x 20 (300 square foot) unit is between $50,000 to $90,000.
Of course, they can be more expensive than that, depending upon a number of factors.
A casita will be less expensive if you’re using an existing structure rather than starting from scratch.
Some individuals already have a cottage on their property, or they are looking to add an addition to a garage.
You may also require extra site work, such as tree removal or ground leveling.
In addition, upgrading your electrical panel to accommodate things like two washing machines and two fridges could cost you more.
You can also end up paying more for upgrades within the structure.
For example, if you’re looking to create an upscale apartment with marble countertops and glass shower doors, you’re going to end up spending more.
If your space is big enough for a full kitchen with a stove and refrigerator, you’ll also pay more for appliances.
Many construction companies charge on a square-foot basis, so you’ll pay more if you’re building a bigger unit.
You can talk to your contractor about what works best for your budget and the planned usage of your casita.
How Can I Afford to Build a Casita?
Many individuals are willing to take out loans or make sacrifices to build a casita now because they know the investment will pay off in the future.
If you don’t have cash on hand, there are a number of options available to you.
One of the most popular ones is a Home Equity Loan or Home Equity Line of Credit (HELOC.)
With these options, you can take out a loan against the equity you have already built up on your home.
Since the casita will, in the long run, improve the value of your house, it is a sensible investment.
Similarly, a cash-out refinance allows you to refinance your mortgage while taking out a lump sum payment that can be repaid over time along with your mortgage payment.
You can consolidate your loan into your existing home payment.
One advantage of a cash-out refinance is that you aren’t restricted in terms of what you can spend the money on.
So, if you want to use the funds to purchase furniture for your casita or pay off a credit card, you can.
Other individuals may finance their casita using a personal loan, construction loan, or local government grant.
You can talk to a local mortgage broker about your best option.
Building Out
Most homeowners find that the cost to build a casita or guest house is well worth it in the end.
They have an apartment or in-law suite that will continue proving them with value for years to come.
Don’t stop planning your casita now.
For excellent contracting work in the greater Phoenix area, contact us today.
Are you looking for a casita builder in Chandler, AZ that will handle your project with care and integrity? The team of professionals at Mariano & Co. is committed to providing each client with a 5-Star experience. Call (480) 287-4096 or request an estimate online today!
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