Introduction: Two Popular Options, One Big Decision

Los Angeles homeowners often face a common question when expanding their property: Should you build an ADU (Accessory Dwelling Unit) or a guest house?

At first glance, they may seem similar. Both offer extra living space. Both are detached or semi-detached structures. And both can improve your home’s functionality and value.

But legally, financially, and functionally, ADUs and guest houses are very different—and it’s crucial to understand those distinctions before starting your project.

1. What is an ADU?

An ADU is a fully independent residential unit built on the same lot as a primary residence. Also known as granny flats or in-law suites, ADUs must include:

• A kitchen
• Bathroom
• Sleeping/living space
• Separate entrance

They are governed by strict California state laws and are permitted for long-term occupancy.

2. What is a Guest House?

A guest house is typically a detached unit meant for temporary stays. It does not usually include a full kitchen or separate address. Guest houses are:

• Considered accessory structures
• Often used by friends, family, or short-term visitors
• Subject to more flexible design but more limited use

They cannot be rented out long-term.

3. Key Legal Differences in LA

Feature	ADU	Guest House
Full Kitchen Allowed	Yes	No (only kitchenette allowed)
Bathroom Required	Yes	Yes
Rental Allowed	Yes (long-term only)	No
Separate Address	Possible	No
Permits Required	Yes (ADU-specific)	Yes (accessory structure)
Zoning Restrictions	State and local ADU laws apply	Local zoning applies

4. Design Flexibility

ADUs are treated like residential units, meaning they must comply with building codes for:

• Energy efficiency (Title 24)
• Egress windows
• Fire safety

Guest houses may be more flexible in size and materials, but also limited in what they can include.

5. Intended Use: Long-Term vs Short-Term

Ask yourself:

• Do you want to generate rental income? ✓ Build an ADU.
• Are you hosting out-of-town guests a few times a year? ✓ A guest house may be sufficient.

Some homeowners build a guest house first, then convert it to an ADU later by adding a kitchen and pulling proper permits.

6. Financial Implications

ADUs:

• Higher construction cost ($100K–$350K)
• Eligible for rent or Airbnb (if local rules permit short-term rental)
• Can significantly increase home value

Guest Houses:

• Lower cost ($50K–$150K)
• No rental income allowed
• Adds lifestyle value, not direct ROI

7. Permit Process Comparison

ADU Permitting:

• Requires full plan set
• May involve utility upgrades (electric, sewer)
• Must meet state and city ADU regulations

Guest House Permitting:

• Simpler process
• May be included in standard accessory building permit

8. Parking & Setback Considerations

Under LA law:

• ADUs may be exempt from parking if near public transit
• Guest Houses must typically meet setback and parking codes

Always confirm site-specific requirements with LADBS.

9. Utility Connections & Costs

ADUs often require:

• Separate water/gas/electric connections (or sub-meters)
• Sewer line extensions

Guest Houses can usually share the main house’s utilities—lowering initial costs.

FAQs: ADU vs Guest House

Can I convert my garage into either?
Yes, but for an ADU it must be fully upgraded. For a guest house, fewer upgrades may be required.

Can I live in a guest house while renting the main home?
No, LA rules typically require the main home to be the primary residence.

Can I build both on one property?
Depends on lot size and zoning. Some properties may allow an ADU + guest suite.

Which adds more resale value?
ADUs almost always add more value due to their income potential.

Can I build either without permits?
No. All structures require permits in LA.

Conclusion: Choose the Right Structure for Your Needs

If you’re looking to increase income, property value, and long-term functionality, an ADU is your best bet. But if you want a cozy space for visitors or a flexible bonus room, a guest house may suit you better.

Still not sure? Let’s walk your property and help you plan the right build.
Contact our ADU specialists in Los Angeles today.