As housing markets tighten and families look for flexible living arrangements, Accessory Dwelling Units (ADUs) have quickly moved from rare backyard projects to a core part of how Utahns think about residential property. Whether you're in Salt Lake City, Herriman, Lehi, Kaysville, or Heber City, adding a legal ADU, or buying a home with one, is a decision that can significantly impact both your lifestyle and the long-term value of your property.
But as attractive as ADUs can be, their impact on an appraisal isn’t always as straightforward as adding square footage. If you're considering building an ADU, converting your basement, or listing a home with one, understanding how appraisers evaluate these spaces and what separates legal from unpermitted is essential to protect your investment and realize its full potential.
For homeowners preparing to sell, refinance, or divide assets, the appraisal of an ADU can make or break your property strategy. That’s why Minson Appraisal Group offers a range of specialized services from pre-listing appraisals to investment property valuations tailored for properties with added complexity.
What Counts as an ADU in Utah?
The definition of an ADU varies slightly across municipalities, but generally, an ADU is a secondary living unit on a single-family residential lot. It may be a basement apartment, a converted garage, an over-the-garage loft, or a separate structure in the backyard.
To qualify as a legal ADU, the space must be functionally independent from the main home. That includes a sleeping area, a bathroom, a private entrance, and a complete kitchen. The kitchen must include:
- A sink with both hot and cold running water
- A stove or cooktop for cooking
- Space for a refrigerator
- A food preparation surface, such as a countertop
- Proper ventilation for the cooking area, such as a range hood or ducted exhaust fan
Without these elements, the space may not meet the legal threshold to be considered an ADU and may be treated as an extra finished area in both city records and the appraisal process.
It’s not just about extra rooms, it’s about functional independence. In places like Draper or South Jordan, the local zoning code will determine whether you can legally build one and whether it can be used for long-term or short-term rental purposes.
If you're planning to convert a space into an income-producing unit, it’s wise to consider a rental income or investment appraisal before setting your price or choosing financing terms.
Legal Standing Isn’t Just a Technicality—It Shapes Value
One of the most common issues we see in appraisals throughout Salt Lake County and surrounding areas is confusion over the legal status of an ADU. Homeowners may have created a beautiful space with high-end finishes and modern design, but if it's not permitted, its value may not be fully recognized in an appraisal.
Legal ADUs, those with city approval, inspection sign-offs, and compliance with zoning and code requirements, can be appraised as a true second unit. This opens the door for comparisons to other properties with similar ADUs and may also support a valuation using rental income or increased utility.
By contrast, unpermitted ADUs, even if well-constructed, are often treated more conservatively. In some cases, the appraiser may only account for the additional finished space or as part of the main home’s living area without recognizing its full standalone utility. This often results in a lower appraised value, especially if the ADU cannot legally be rented.
This distinction becomes even more critical in situations involving divorce, estate settlement, or trust planning. An accurate, legally defensible valuation is essential, and that’s exactly what our estate and trust appraisal services and divorce appraisals are built to deliver.
Rules Vary Across the Salt Lake Metro—And They’re Changing
What’s legal in one city might not be in another. Salt Lake City has been actively updating its ADU ordinances, allowing for more flexibility in many neighborhoods. Millcreek, Holladay, and Murray have each taken different approaches to permitting, density, and rental restrictions. Herriman and Bluffdale often lean more conservative, while areas like Park City and Heber in Summit and Wasatch counties tend to have different considerations altogether, especially with vacation rentals and luxury second homes in the mix.
This patchwork of regulations makes it critical for homeowners to do their homework before construction or renovation. Working with a local appraiser who knows the nuances of each city's approach to ADUs can make a significant difference in getting an accurate and defensible valuation.
Minson Appraisal Group provides regional coverage across Salt Lake, Utah, Davis, Weber, Tooele, Summit, and Wasatch counties. We stay current on zoning shifts and market responses to help you appraise your ADU accurately, no matter the location.
How Appraisers Evaluate ADUs in Utah
At Minson Appraisal Group, we approach each ADU with a deep understanding of both appraisal standards and regional market realities. We consider multiple factors, some of which go beyond the physical characteristics of the unit.
The appraisal process will typically weigh whether the ADU is detached or attached, whether it has its own utility meters, and how similar properties in the area are valued. If the market supports income-producing ADUs, such as in certain areas of Salt Lake or Park City, we may incorporate the income approach, estimating value based on potential rent.
In more residential-focused areas like West Jordan, Kearns, or Eagle Mountain, the sales comparison approach is usually more appropriate. In that case, finding other homes with legally recognized ADUs becomes the key to supporting value. Unfortunately, if those comparable sales don’t exist or the ADU lacks permits, the added value may not match what a homeowner expects.
For real estate agents and homeowners preparing to sell, this is where a pre-listing appraisal can provide clarity and confidence, ensuring your asking price reflects the property’s true potential.
Maximizing the Appraisal Value of Your ADU
To get the most value from an ADU, legality and usability are only the starting point. Homeowners should be prepared to document their upgrades, provide evidence of code compliance, and clarify how the unit is currently used. If the ADU has been used as a rental, showing income history or tenant agreements can help frame its value in economic terms.
But equally important is helping the appraiser understand how the ADU fits into the broader market. Is it used for multigenerational living? Has it been upgraded to match the main home in finish quality? Does it serve as a private space for adult children or aging parents? These uses, even when not tied to rental income, can make a property more desirable and justify a stronger market position, especially in high-demand areas like Sandy, Bountiful, or Sugarhouse.
If your ADU plays a central role in how you plan to divide assets or navigate property ownership changes, our appraisal services for dispute resolution or trusts and estates can offer the documentation you need.
The Role of Zoning and City Records in Final Valuation
Many homeowners are surprised to learn how heavily appraisals depend on public records and city data. If your ADU isn’t listed on the city’s parcel file or hasn’t been assessed as a second unit, the appraiser may be limited in how they can value it, even if the physical structure is sound.
This is why we recommend ensuring that all permits are filed and closed properly, and that your ADU is registered where required. In Salt Lake City and some surrounding areas, failing to register an ADU, even if it’s permitted, can result in it being appraised at a lower tier of utility. This is especially important when refinancing, preparing for sale, or navigating divorce or estate planning where exact valuation matters.
A Smarter Strategy for Homeowners and Investors
ADUs can unlock value, provide flexibility, and offer new income potential, but only when approached strategically. Throughout the Salt Lake metro, we’ve seen homeowners benefit from converting basements or garages into legal ADUs. But we’ve also seen others frustrated when an unpermitted or poorly documented ADU didn't increase their home’s value the way they expected.
Whether you’re planning to build, remodel, or sell, your first step should be an informed conversation, not just with your contractor, but with a qualified appraiser who understands local zoning, construction realities, and market comparables. That’s where Minson Appraisal Group can help through customized services for home sales, rental evaluations, refinancing, or estate planning.
Get More from Your ADU—with the Right Appraisal Partner
At Minson Appraisal Group, we specialize in understanding the complexity of real property across Salt Lake, Utah, Davis, Weber, Tooele, Summit, and Wasatch counties. Our team is well-versed in how ADUs affect property value, legally, practically, and market-wise.
Whether you're preparing to sell, refinancing with an ADU, dividing assets in a divorce, or simply want a clear picture of what your home is worth with the extra unit, we’re ready to help. Let us provide the defensible appraisal you need to move forward with confidence.
Want to know what your ADU is really worth? Contact Minson Appraisal Group today for trusted local appraisal expertise.
Accessory Dwelling Units in the Salt Lake Metro: What Homeowners Should Know About Appraisals, Legality, and Maximizing Value