The ADU Effect on Valuation in Denver
Short version: in 2025, appraisers and buyers aren’t pricing ADUs by tacking on main-house $/sqft. They’re weighing contributory value (what the ADU adds in the comps) and income potential (what it can rent for)—and buyers are underwriting both.
What I’m seeing in reports: the sales comparison grid carries most of the weight, with paired comps that bracket similar ADUs (size, finish, access, parking). Then, a sanity-check via income: stabilized rent (long-term or well-documented mid/short-term where allowed), typical vacancy/expenses, and a market cap/GRM to support the adjustment. That produces a tighter, defensible premium than “cost to build.”
Why it matters now: money got cheaper and Denver inventory is still measured in weeks, not months. The 30-yr fixed averaged ~6.15% the week ending Dec 31, 2025, and city data shows ~$575K median with ~43 DOM in November—so rentable space is a real differentiator in offers and appraisals.
Financing boost: recent Fannie Mae guidance lets certain borrowers count ADU rent toward qualifying income on one-unit primaries, which effectively raises buying power for ADU homes (and supports value). Appraisers still won’t roll ADU square footage into GLA, but they will reflect its contributory value in the grid with support from rent comps.
Actionable tip (buyers & sellers): document the unit like a mini-rental—permit set, bed/bath count, separate entrance/parking, utility metering, and a clean rent comp packet (12 months if you have it). That package helps the appraiser—and your deal—pencil.
— Andy
Vail Peak Realty | Park Hill resident & neighborhood guide
#DenverRealEstate #MarketPulse #ADU #Appraisal #BuyerTips #VailPeakRealty
