Are Tiny Homes or ADUs Actually Adding Resale Value in Central Oregon?

Accessory Dwelling Units (ADUs) and tiny homes have been popping up across Bend, Redmond, and surrounding areas. With Bend loosening zoning restrictions and more buyers interested in flexible housing options, it’s a hot topic: do these small spaces actually boost resale value, or are they just trendy backyard projects?

1. The Growing Demand for Flexibility

In Central Oregon, an ADU can serve as:

• Rental income (long-term or short-term, depending on city rules)

• Multigenerational housing for aging parents or adult children

• Home office or creative space in an era of remote work

Buyers increasingly see this flexibility as a major plus—especially when housing affordability is tight.

2. Impact on Resale Value

Studies show that a well-built ADU can add 20–35% of its construction cost to a home’s value. However, the true value boost in Central Oregon often comes from marketability. Homes with a legal, permitted ADU often sell faster and attract more buyers, even if the appraised value doesn’t fully capture the income potential.

3. City Rules Matter

Bend and Redmond have been adjusting zoning to encourage more housing options, including ADUs and tiny homes. But each city has different rules on:

• Maximum size

• Utility hookups

• Parking requirements

• Short-term rental eligibility

A permitted, code-compliant ADU will almost always add more resale value than an unpermitted unit—no matter how nice it looks.

4. Tiny Homes as a Wild Card

A tiny home on wheels or a non-permanent foundation may not be counted in appraisals the same way as an ADU. However, if marketed right, it can still draw interest from buyers who value the extra space for guests, rentals, or hobbies.

In Central Oregon, an ADU or tiny home can absolutely make your property more attractive and possibly increase its resale value—if it’s built legally, blends with the property, and serves a clear function buyers want.

FAQs

Q: Does an ADU increase property taxes?

A: Yes—adding livable square footage will likely raise your assessed value and taxes. However, the added rental income or resale appeal often outweighs the increase.

Q: Can I Airbnb my ADU in Bend or Redmond?

A: Bend allows short-term rentals in certain zones with permits, but there are restrictions and application processes. Redmond’s rules are more limited, so always check city regulations before counting on STR income.

Q: How much does building an ADU in Central Oregon cost?

A: On average, $150–$350 per square foot depending on design, finishes, and site work. Converting an existing structure (like a garage) can be cheaper than building new.

Q: Do unpermitted ADUs add value?A: Usually no—banks and appraisers can’t count them as official living space. They may even scare off buyers who don’t want the headache of retroactive permitting.

Q: Are tiny homes on wheels treated the same as ADUs?

A: No—unless they’re on a permanent foundation and meet building codes, they may be classified more like RVs than permanent dwellings.

Q: Which adds more resale value—an ADU or a kitchen remodel?

A: It depends on your market. In Central Oregon’s tight housing market, a permitted ADU can sometimes be more attractive than a remodeled kitchen because it offers income potential.