Top 5 Mistakes Homeowners Make When Building an ADU

Building an Accessory Dwelling Unit (ADU) is one of the smartest ways to maximize your property’s potential—whether you're planning to generate rental income, create a private space for family, or increase your home's value. But despite the rising popularity of ADUs in California, many homeowners dive into the process without understanding the complexities involved. The result? Costly delays, code violations, and unexpected headaches.

At First Round Construction, we've helped homeowners across Los Angeles and Orange County turn their backyards into beautiful, functional living spaces. And along the way, we’ve seen the same mistakes pop up again and again.

If you’re thinking of building an ADU, here are the top five pitfalls to avoid—plus tips on how to get it right from day one.

1. Underestimating the Cost of an ADU

Too many homeowners approach ADU construction with an overly optimistic budget. They read a blog or hear from a friend that it only costs $100,000–$150,000 to build an ADU. But in reality, costs can vary dramatically depending on the site conditions, design complexity, materials, permits, and local labor rates.

Common cost-related mistakes:

• Not accounting for utility upgrades (especially sewer and electrical)

• Forgetting soft costs like architectural plans, city fees, and engineering

• Assuming DIY or prefab kits will drastically reduce expenses

How to avoid it: Start with a realistic, detailed estimate from a licensed general contractor. At First Round Construction, we provide upfront assessments, so you’re not blindsided later. It’s also smart to set aside a 10-15% contingency budget for unexpected issues once construction begins.

2. Skipping the Pre-Planning and Permitting Phase

Every city in California has different rules about what you can build, where, and how. And while recent state laws have made ADU construction easier, it doesn’t mean you can just start building in your backyard without approvals.

What can go wrong:

• Getting red-tagged (construction stopped) for building without permits

• Designing an ADU that doesn’t meet setbacks, height limits, or parking requirements

• Wasting thousands on plans that the city won’t approve

How to avoid it: Start with a feasibility review. Before drafting plans, consult with a contractor who understands your local zoning and building codes. In many cases, we handle the entire permitting process for our clients to save them the stress and confusion.

3. Choosing the Wrong Contractor or Trying to DIY

An ADU is not just a shed or tiny home—it’s a full-fledged residential unit with plumbing, electrical, structural, and energy-efficiency requirements. Homeowners who try to piece together the build themselves or hire an unlicensed handyman often run into serious issues.

Red flags to watch for:

• “Too good to be true” low bids

• Contractors without proper licensing or insurance

How to avoid it: Hire a licensed, bonded, and insured general contractor. Look for a builder who can manage the entire process, from design to final inspection, with clear communication at every step.

4. Poor Design Decisions That Hurt Functionality

A well-designed ADU can feel spacious, bright, and efficient—while a poorly designed one may feel cramped and uncomfortable. Unfortunately, homeowners often cut corners here, either by copying cookie-cutter plans or ignoring the realities of the lot.

Common design mistakes:

• Poor natural light or window placement

• Inadequate storage or closet space

• Layouts that waste square footage or create awkward corners

• Forgetting about soundproofing between the ADU and main house

How to avoid it: Work with a designer or builder who specializes in small space optimization. ADUs need smart, intentional layouts. We always guide our clients toward functional, livable designs that maximize comfort—and resale value.

5. Not Thinking Long-Term

Building an ADU is a big investment, and homeowners should think beyond the immediate benefits. Will this ADU still meet your needs in 5, 10, or 20 years?

Things homeowners often overlook:

• Future accessibility (e.g., stairs vs. ramps)

• Multi-use needs (office, rental, guest suite)

• HOA restrictions or neighborhood concerns

• Long-term maintenance costs

How to avoid it: Think strategically. Ask yourself: Will I want to rent this out? Could a family member move in later? Could this become my office or even my retirement suite? Plan ahead with the future in mind, not just the present.

The Bottom Line

Building an ADU is one of the most rewarding ways to add value to your home, but it's also a serious undertaking. By avoiding these common mistakes—and partnering with a knowledgeable, transparent builder—you can enjoy a smooth, stress-free process from start to finish.

At First Round Construction, we specialize in ADU construction across Los Angeles, Orange County and surrounding areas. We’re here to help you every step of the way—from concept and permits to a move-in ready unit.

Thinking about building an ADU?Contact us for a free consultation and see if your property qualifies.

📞 Call us (949) 337-5311 or fill out the form at firstroundbuild.com