These ranges reflect the Chattanooga and broader Tennessee market and are based on typical project scopes at each ADU type. They are starting points for planning purposes, not firm quotes. Your actual cost depends on the specifics of your property and project.

Garage Conversion ADU: $40,000 to $100,000 Converting an existing attached or detached garage into a livable ADU is generally the most affordable path. The structure already exists, which eliminates foundation and framing costs. The work involves insulation, drywall, flooring, a kitchen or kitchenette, a bathroom, HVAC, electrical upgrades, and permitting. Costs vary based on the size of the garage and the finish level.

Attached ADU: $80,000 to $160,000 An addition built onto the side or rear of the existing home. More expensive than a conversion because it involves new foundation work, framing, roofing, and full utility connections, but typically less than a fully detached structure because it can share some existing systems.

Detached ADU: $100,000 to $200,000 or more A standalone structure built separately from the main home. This is the most expensive ADU type because it’s essentially a small home built from scratch. Foundation, framing, roofing, all mechanical systems, and a full utility connection are all required. Size, design complexity, and finishes determine where in the range a given project lands.

Basement ADU: $50,000 to $120,000 Converting an existing unfinished basement into a legal ADU with a separate entrance. Costs depend heavily on the current condition of the basement, ceiling height, whether egress windows are needed, and the extent of plumbing and electrical work required.

A standard ADU build quote from a reputable contractor will generally include design and engineering fees, permit application costs, site preparation, foundation work where applicable, framing and structural work, roofing, exterior finishes, insulation, drywall, flooring, kitchen and bathroom fixtures and finishes, electrical and plumbing rough-in and finish, and HVAC installation.

Items that are sometimes quoted separately or treated as add-ons include landscaping and site restoration after construction, utility connection fees charged by the utility provider, appliance packages beyond basic fixtures, exterior lighting and hardscaping, and any site-specific work like tree removal or significant grading that goes beyond standard prep.

When comparing quotes from contractors, make sure you’re comparing the same scope. A lower number that excludes several of these items isn’t actually a lower cost for the same project.

Site conditions. A flat, accessible lot with existing utility connections nearby is the easiest and least expensive site to build on. Steep grades, poor soil, limited access, or lots that require long utility runs add cost before a single wall goes up.

Size of the unit. Larger ADUs cost more. This seems obvious, but the relationship isn’t always linear. A 400-square-foot studio is not half the cost of an 800-square-foot one-bedroom because many of the fixed costs, like permitting, utility connections, kitchen, and bathroom, are similar regardless of total square footage.

Finish level. Standard finishes, meaning durable but not high-end, keep costs lower. Custom cabinetry, premium flooring, high-end appliances, and designer fixtures add up quickly in a small space. Define your finish expectations early and make sure they’re reflected in the estimate.

Existing structure condition. For garage conversions or basement ADUs, the condition of the existing structure matters. A sound, properly sized garage with good bones costs less to convert than one that needs structural repairs or has significant moisture issues.

Permitting complexity. Hamilton County and Chattanooga municipality permitting fees are a real line item. They vary by project type and scope. In some cases, zoning or design review requirements add both time and cost to the permit process.

For most Chattanooga homeowners in the right situation, yes. But the answer depends on why you’re building it.

For rental income. A well-located ADU in Chattanooga can generate meaningful monthly rental income. With the area’s continued population growth and limited rental inventory, demand for smaller, well-built rental units has remained strong. An ADU that costs $120,000 to build and generates $1,200 to $1,500 per month in rent pays for itself over time and continues generating income indefinitely.

For home value. ADUs generally add to a property’s appraised value and market appeal, particularly as multigenerational living becomes more common. The value added varies by market and property type, but a well-built ADU rarely hurts resale value and often helps it.

For family use. If the purpose is housing a parent, adult child, or other family member, the financial return looks different but the value is real. Avoiding assisted living costs, keeping family close, and maintaining independence within the same property are benefits that don’t show up on a spreadsheet but matter enormously to the families making these decisions.

For long-term flexibility. Many homeowners build ADUs knowing they’ll use them differently over time, as a rental now, for a family member later, or as a personal studio or home office in the interim. That flexibility has value even if the immediate use case isn’t rental income.