Yes — and usually significantly
A permitted, well-built ADU typically adds 20–35% to a California home's resale value, depending on neighborhood comps, ADU size, and finish level. On a $1.2M home, that's often $250,000–$400,000 in added equity.
How appraisers actually value ADUs
Appraisers use two main approaches: income capitalization (capitalizing the rental income at a market cap rate) and direct comparison (finding comparable homes with ADUs that have recently sold). In Southern California's strongest rental markets, the income approach often produces higher numbers than the comparison approach.
What hurts ADU appraisal value
Unpermitted work — even high-quality construction — typically gets discounted or excluded from value entirely. Substandard finishes, poor design integration with the main home, and visible code issues all reduce appraised value. This is why permitted, professionally designed and built ADUs deliver dramatically better long-term returns.