3 reasons why investing in an ADU is one of the smartest investment decisions you’ll make in your lifetime.

sonder live modular house

3 reasons why investing in an ADU is one of the smartest investment decisions you’ll make in your lifetime.

Saving enough money to retire in California is tough. Not only do we have to pay off the most expensive houses in the nation, but we also have to save enough to be able to afford to live in the state with the highest cost of living too. As house prices explode as well as the associated property taxes, more than 39% of Californians “mortgage burdened” which means that more than 30% of their monthly income is used up on meeting their mortgage payments. If so much of your monthly income vanishes on mortgage payments, it becomes almost impossible to save the amount of money we’ll need to enjoy a comfortable retirement.

The need to break this cycle is becoming critical to millions of Californians if they hope to have a comfortable and enjoyable retirement in the state they call home now.

Building an ADU on your property with SonderPods could be one of the best investments you will make in your lifetime. Here are the three key reasons why:

Reason One: ADU’s instantly add value to your home

The average cost of houses has crossed $500 per square foot across the wider bay area with some areas crossing $1000 per square foot. Our houses are among the most expensive in the nation. But this provides us with the first great opportunity for adding value to your home with SonderPods and it’s incredibly simple! If you can add floor space to your home at a cost that is less than the value that it will add to your house then you are winning.

SonderPods are efficiently built in a factory to keep quality high and costs down. A 750 square foot SonderPod can be installed on your property for around $230 per square foot


Current Value of your home per square foot $500
Cost of your 750 square foot SonderPod

($233 per square foot including an average allowance for foundations & utility connections)

Potential value increase

(Size of the SonderPod multiplied by the square foot value of your existing home)

Immediate potential value gain from adding your SonderPod $200,000

Reason Two: You could pay off your mortgage 8 years faster


If you put one penny on the first square of a chess board, then on the second square you double that to 2 pennies. On the 3rd square, you double it again to 4 pennies and so on until you have covered the 64 squares of the chess board. You might be surprised that on that 64th square of the chessboard you would placing $93,233,720,368,547,800 – now I had to google what that number is and it’s ninety-three quadrillion dollars which I believe is more money than exists in the world today. What I am describing here is the power of compounding interest, something that Albert Einstein described as one of the most powerful forces in the universe.


Your mortgage is also an example of compounding interest working against you. That small interest rate that you are paying adds up to be a lot of money over the duration of a 30-year mortgage. On a typical $500,000 mortgage with a 4.25% interest rate around $1800 of your $2500 mortgage payment will be going straight to the bank in interest payments rather than paying off your home. That’s right, only $700 of your hard earned $2,500 mortgage payment actually goes towards paying off your home. When you add these interest payments up over 30 years, you would have paid over $880,000 to pay off your $500,000 mortgage.


But don’t worry, there is some good news and you can use compounding interest to your advantage. Making small additional payments can have a massive impact on the cost of your mortgage.


The table below outlines how renting out an ADU on your property from Sonderpods will not only pay for itself but it will also help you make additional payments and pay off your mortgage 8 years faster, saving you $138,000 in mortgage payments.


Mortgage Amount at 4.25% Your Monthly Payment Mortgage payment contribution from your SonderPod Years to Pay Off Money Saved
Current Mortgage $500,000 $2500 $0.00 30 $0.00
New Mortgage

($500k original mortgage + $100k for your SonderPod)

$600,000 $2500 $1000

(Assuming $1500 rent and 33% tax)

22 Over $138,000


Obviously, this table should be updated for your particular situation but your SonderPod team can help you understand the potential savings you could make by adding an ADU to your home.

Reason Three: You could need to save $450,000 less for your retirement


Hopefully, you are making regular payments into your 401k and that balance is building up over time from the tax benefits and as the markets continue to climb. But what kind of income will this provide for you in retirement?

The widely accepted rule of thumb is that you can expect your retirement income to be 4% of whatever you have managed to save throughout your lifetime. To have a retirement income of $60,000 a year, you will need to save a massive $1.5 million dollars. To put this into context, a 30-year-old need to make sure that their retirement savings are increasing by $50,000 a year if they hope to retire at 55 – a tough ask if over 30% of your income is already committed to your mortgage payments.


This is where the rental income from your SonderPod can make all the difference in helping you prepare for an enjoyable retirement. With an average annual rental income of $18,000 a year, your SonderPod will provide you with the same income that $450,000 of retirement savings would bring you.


You should always have your own financial plan in place for your retirement, but how much better would you feel about your preparation for your retirement if nearly a third of what you need to retire was already in place?



An investment that pays for itself and pays your house off 8 years earlier AND could reduce what you need to save for retirement by nearly half a million dollars?!


To some, this might all sound too good to be true but it’s actually just a simple process of understanding the compounding impact that small changes can have over longer periods of time.


At SonderPods, we keep the cost of construction low and pass those savings onto our customers. If you have to spend less to create an income stream now and use this additional money wisely, it can truly be life-changing.

To understand more about whether adding an ADU to your property can have a big impact on your retirement plan you’ll first need to confirm that your home qualifies for an ADU. Your SonderPod team can pre-approve your home for an ADU within 48 hours.

ADU’s are the next revolution in California housing

ADU’s? The next housing boom?


There is no denying it, the ADU revolution has well and truly hit California. Annual applications for Accessory dwelling unit have exploded from 70 to over 2000 between 2015 and 2017 in Los Angeles alone. This is only the beginning as it is estimated that more than 500,000 homes in California qualify for an ADU. But what is driving this revolution and how can you take advantage of it?


What is an ADU?


Accessory Dwelling Units, or ADU, are secondary homes, today’s mother-n-law house if you will located on the same parcel of land as an existing home. These are permanent homes are self-contained with a private entrance, a full kitchen, and a full bath and have floor plans of up to 1200 sqft.

What is driving this revolution?


Supply & Demand


Demand for new housing is much greater than the growth of the California housing stock. For every 100 new residents to the state, there is less than 25 housing permits filed compared to over 43 permits per 100 new residents nationwide.

What does this mean? There more prospective tenants than there are houses so homeowners are confident that they will be able to rent out their ADU at a rate that is more attractive than almost any other secure investment.




More than 1 million residents of California left the state between 2006 and 2016. Why? The cost of housing ranks as the number 1 reason. In comparison to the rest of America, California’s median sale price is more than twice. Not only do Californians have the most expensive houses, they also have the biggest mortgage payments to make. When more than 40% of your net income disappears every month in mortgage payments every month, it does not leave a lot for holidays, luxuries or more importantly saving for retirement.

The additional income that an ADU brings can easily pay off a mortgage years faster or provide a healthy stream of income for holidays and those special thing we could not otherwise afford.  

What would you do with an extra $20,000 a year?


Increasing Property Values


With some careful planning, the cost of adding an Accessory Dwelling Unit to your home, increases the value of the property by more than what it costs to build the unit. For example an installed Sonderpod costs around $120,000 but depending on where you live, doing this can easily add more than $250,000 to the value of the home.


Can you think of a better way to make an instant $100,000?


It’s encouraged by Government


Experts are warning us that by 2025, the state of California will be short as many as three million homes if things aren’t changed soon. Realizing there is housing issues that could be easily resolved, more and more local governments are passing measures which have made it easier for a homeowner to build an ADU.

In 2016, law was passed at a California level (SB1069) that significantly simplified the process of getting an ADU approved for your home. The law states that if your property meets certain criteria then your application will be approved at a local level and within 90 days.

Criteria For Approval Includes:


  • You have enough space on your property for the unit.
  • The unit is on a solid foundation and includes and kitchen and bathroom.
  • Has parking for the occupants or public transport is close by.


Want to learn more or see if you home qualifies for an ADU? SonderPods can help pre-approve your home within 48 hours. Get Pre Qualified Today!


The perfect solution for your aging parent

By the time you finish reading this article, approximately seven baby boomers will have reached retirement age. As the U.S.’s largest generation exits the workforce, new retirees should be allowed the freedom to be near family, and live life to its fullest.

In California today, however, housing prices are high and growing higher. 39-percent of Bay Area residents are now considered “cost-burdened”–meaning over 30% of their income is dedicated to housing costs alone–and the problem is far more dire for those no longer in the workforce. With an estimated 8%+ rise in California housing prices over the coming calendar year, grandparents are being left out in the cold, forced to move far away from their children and grandchildren simply in order to afford the costs of living. A dollar today simply doesn’t go as far as it once did, and families are being stretched because of it.

Too often today, getting to see your grandkids requires more than just a short walk down the street or a short drive to the next town over–nowadays it takes hours-long drives or even flights.  But is it really so much to ask, that family get to live near family?

Here, finally, is the solution: SonderPods.

SonderPods are the most cost-effective way for elderly individuals to live comfortably, in close proximity to family. And the concept is deceptively simple.

SonderPods are high-quality modular accessory dwelling units: in other words, they’re luxury guest houses, at less than half the cost. You can have your new SonderPod ready to go in just two weeks’ time—a functioning, prefabricated, fully-furnished home, dropped right into your backyard. That means baby boomers can finally live close to family while maintaining the independence of having their own home.

If you’re still not convinced, consider this: the average cost per square foot of constructing a new building in California today averages at around $400. For higher-end and smaller projects, this number can jump as high as $700 or more. SonderPods are built to the same code and standards as any other home, for just $250 per square foot installed. That often double the rate of return on your dollar.

Are you, or a relative close to you, retiring or planning to retire soon? There is simply no better, more fiscally responsible way to start a new life in the Bay Area, nearest to the ones you love, than with SonderPods.

If you are still saving for your retirement, our blog post on how a SonderPod can help you enjoy a better retirement years earlier is a must read. Click Here!

Not all homes meet the criteria to be approved for an accessory dwelling unit so we have created an ADU Approval Checklist that covers the major requirements for approval.  Your SonderPod team can also pre-qualify your home in just 48 hours. To find out if your home qualifies, Click Here!

***Certain restrictions may apply, as SonderPods require a predetermined amount of available land, and must qualify under all relevant California law.


What is an ADU – Accessory Dwelling Units

An Accessory Dwelling Unit (ADU), is a secondary dwelling unit with complete independent living facilities for one or more persons and generally takes three forms:

  • Detached: The unit is separated from the primary structure
  • Attached: The unit is attached to the primary structure
  • Repurposed Existing Space: Space (e.g., master bedroom) within the primary residence converted into an independent living unit
  • Junior Accessory Dwelling Units: Similar to repurposed space with various streamlining measures

ADUs, Accessory Dwelling Units, offer benefits that address common development barriers such as affordability and environmental quality. ADUs are an affordable type of home to construct in California because they do not require paying for land, major new infrastructure, structured parking, or elevators. ADUs are built with cost-effective one or two-story wood frame construction, which is significantly less costly than homes in new multifamily infill buildings.

ADUs can provide as much living space as the new apartments and condominiums being built in new infill buildings and serve very well for couples, small families, friends, young people, and seniors. ADUs, Accessory Dwelling Units, are a different form of housing that can help California meet its diverse housing needs. Young professionals and students desire to live in areas close to jobs, amenities, and schools. The problem with high opportunity areas is that space is limited. There is a shortage of affordable units and the units that are available can be out of reach for many people. To address the needs of individuals or small families seeking living quarters in high opportunity areas, homeowners can construct an ADU on their lot or convert an underutilized part of their home like a garage into a junior ADU. This flexibility benefits, not just people renting the space, but the homeowner as well, who can receive an extra monthly rental income.

ADUs, Accessory Dwelling Units, give homeowners the flexibility to share independent living areas with family members and others, allowing seniors to age in place as they require more care and helping extended families to be near one another while maintaining privacy. Relaxed regulations and the cost to build an ADU make it a very feasible affordable housing option. A UC Berkeley study noted that one unit of affordable housing in the Bay Area costs about $500,000 to develop whereas a SonderPod costs less than $100,000 + Installation making the prospect of owning an ADU much more accessible to homeowners.

City councils are encouraging the development of ADUs as they are a critical form of infill development that can be affordable and offer important housing choices within existing neighbourhoods. ADUs, Accessory Dwelling Units, are a powerful type of housing unit because they allow for different uses, and serve different populations ranging from students and young professionals to young families, people with disabilities and senior citizens. By design, ADUs are more affordable and can provide additional income to homeowners. Local governments can encourage the development of ADUs and improve access to jobs, education and services for many Californians.