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The Complete Guide to Building an ADU in Sacramento (2025 Update)

Custom-built ADU in Sacramento by GBG Construction Inc., featuring a modern second-story addition with private entrance and utilities.
By GBG Construction Inc. | Posted: July 1, 2025

If you’ve ever thought about building a backyard home, in-law suite, rental unit, or second story addition, you’re in the right place. In 2025, building an Accessory Dwelling Unit (ADU) in Sacramento is not only easier than ever — it's one of the smartest investments you can make in California real estate.

At GBG Construction Inc., we’ve helped homeowners all across Sacramento and surrounding areas build high-quality, code-compliant ADUs that increase property value, create passive rental income, and offer multi-generational housing options.

Let’s break it all down — no fluff, just the facts, backed by real experience.


🔧 What Is an ADU?

An Accessory Dwelling Unit (ADU) is a self-contained residential structure built on the same lot as a single-family or multifamily home. It can be:

  • Detached: A new structure in the backyard

  • Attached: An extension of the existing home

  • Garage Conversion: Converting an existing garage

  • Above-Garage or Second-Story: Built on top of your home or garage

  • Basement Conversion or Internal ADU: A portion of the main home split into a separate unit

🏡 Land Requirements & Eligibility in Sacramento

The good news? Most single-family and multifamily lots in Sacramento are now eligible to build at least one ADU — thanks to California’s state laws (AB 68, AB 881, SB 9, etc.).

Here’s what you need to know:

✅ No minimum lot size requirements✅ You can build 1 ADU and 1 JADU (Junior ADU) on a single-family property✅ Multifamily properties can have 2 detached ADUs + more internal conversions✅ Setbacks are minimal — as little as 4 feet from rear and side property lines✅ No HOA can legally prohibit you from building an ADU✅ Parking requirements are waived in many zones, especially near transit

📏 What Can You Build? (And Where?)

You can typically build up to:

  • 1,200 sq ft for a detached ADU

  • 850–1,000 sq ft for attached or internal ADUs

  • 16 ft height limit for single-story; 18–25 ft in some cases (with 2nd story options)

Need to build where there’s no yard? We did that. In Davis, CA, our team built a 995 sq ft ADU on top of a single-story home — full second story with a separate entrance, separate address, and separate utilities.

Yes, it’s possible. And yes, we can do it again.

📝 The Permitting Process: Step-by-Step

At GBG Construction Inc., we handle everything for you — but here's a breakdown of what the city requires:

  1. Site Feasibility Review

    • We check your lot, zoning, setbacks, and utility access.

  2. Architectural Plans & Engineering

    • We create custom floorplans tailored to your lot and budget.

  3. Permit Submittal

    • We submit your plans to the City of Sacramento and coordinate with Building, Zoning, and Planning.

  4. Corrections & Approval

    • We manage all plan check corrections until full approval.

  5. Construction Begins

    • From grading and foundation to finish work and final inspection — we handle the full build.

Timeline: Permits can take 2–6 weeks to approve. Full build time is usually 4–6 months, depending on complexity.

💰 ADU Rental Income Potential in Sacramento

Let’s talk numbers. Here’s what you can expect to earn from an ADU in the Sacramento area (2025):

ADU Size

Monthly Rent (Est.)

Studio (400–500 sf)

$1,200–$1,500

1-Bedroom (500–700 sf)

$1,600–$1,900

2-Bedroom (700–1,000+ sf)

$2,000–$2,500+

That means you could be earning $18,000 to $30,000 per year in passive income — often more if you're in desirable zip codes like 95864, 95628, 95825, or Midtown/Downtown.

📈 The Investment Case: Is It Worth It?

In short? Yes. 100%.

Let’s say you build a $250,000 ADU.You rent it out for $2,000/month — that’s $24,000/year.

You’ll earn your investment back in just over 10 years, often less with appreciation and tax benefits.

If you finance the build (which many do), the renter pays the monthly loan, and you keep the extra cash — starting day one.

This isn’t just an improvement — it’s a long-term asset that:

  • Adds resale value (often over 100% of cost)

  • Generates cash flow

  • Qualifies for favorable financing (even FHA-backed in some cases)

  • Makes your property more flexible for aging parents, guests, or adult children

🛠️ How GBG Construction Inc. Makes It Easy

We’re a local, full-service ADU builder. That means:

✅ Free on-site consultation✅ Full design + permit support✅ Clear, upfront pricing✅ Custom options for budget builds or high-end rentals✅ Built by licensed pros — not subcontracted out with shortcuts

From garage conversions in East Sacramento to elevated ADUs in Davis and backyard rentals in Arden-Arcade, we’ve done it all.

You’ll get straight answers, honest quotes, and a team that actually cares.

🏁 Ready to Start?

Let’s explore your lot, your vision, and your goals — no pressure, just answers.

📞 Call us today at (916) 247-3139🌐 www.gbgconstructioninc.com📍 Serving Sacramento, Davis, Elk Grove, Citrus Heights, Fair Oaks, and surrounding areas.

GBG Construction Inc. — We don’t just build.We build smart, we build right, and we build to last.


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