The two most common ADU strategies
Most California homeowners considering an ADU end up choosing between converting an existing garage and building a new detached unit in the backyard. Both are legitimate, both are permitted regularly, and both can be excellent investments — but they fit very different properties and goals.
Cost comparison
A typical garage conversion in LA runs $120,000–$220,000. A typical detached ADU runs $250,000–$450,000+. The garage conversion saves money primarily because the slab, walls, and roof already exist.
Rental income and resale comparison
A converted garage unit typically rents for $1,800–$2,800/month. A new detached ADU typically rents for $2,500–$4,500/month — and adds more to resale value because appraisers treat it as net-new square footage. On a pure ROI basis the two are often surprisingly close, because the detached ADU's higher cost is offset by higher rent and stronger appraisal lift.
Which one is right for you
Choose a garage conversion if your garage is in good condition, you want lower upfront cost, you don't need parking, and you want a faster timeline. Choose a detached ADU if you have backyard space, want maximum rental income, want maximum property value lift, or plan to use the unit for long-term multi-gen living.