What Does an ADU Actually Cost to Live In Each Month Compared to a Starter House?

By Buz Artiano, BuildX | September 2026

Watch: The Creighton Family Built an ADU in 98 Days, Here's the Full Story

You've figured out the cost and it came out ugly. A new ADU built on your own property costs close to what a small older house costs in the same area, so the best idea seems to be to buy the house instead. We hear that objection all the time in the comments on our videos: for that money, go buy a starter house. It's a fair thing to say, and just the price won't settle it, because the price isn't the cost that you live with. That will be paid every month.

My name is Buz Artiano, and I am the founder of BuildX. We've built dozens of ADU projects across Massachusetts, mostly around the South Shore and Plymouth County areas. We are the only team you need. We do the design, permitting, and construction. So we see every phase of a project from the first site visit up until you move in. We evaluate septic constraints, zoning issues, utility connections and the requirements for a permit from the city. Massachusetts allows one accessory dwelling unit by right in single family zoning areas, although municipal building code, health code, and dimensional requirements still apply to every project. You can review the state requirements at mass.gov. We stay close enough afterward to know what the building costs are going to be.

Terry and Kevin Creighton are BuildX clients. We built a 900 square foot ADU above a garage on their Plymouth property for their daughter Abby and her partner Raya, and the couple moved in on Mother's Day. Before that, as first-time buyers Abby and Raya spent months looking for a house on the South Shore. They toured the houses that were really for sale at their price and they now live in the alternative so the family has considered both options.

You'd expect us to give you examples from families who've had a good experience with us. We're sharing this one because Abby and Terry looked around first and can describe what the cheaper houses were like. Their opinion about the market is worth more to you than our opinion of our own product.

What Do You Actually Pay Each Month in an ADU Versus a Starter House?

You pay for a different set of categories. That's the complete answer, and it's why just comparing the sticker prices gives you the wrong result. A separate piece of property has its own fixed obligations from day one. An ADU on a lot that already has services shares some of those obligations instead of creating them again.

Five line items that change depending on the decision and these are the five that make the difference:

• Private mortgage insurance, which you need with a conventional house if you're putting less than 20 percent down isn't required for a building on land your family already has
• Fixed utility base charges, which is the flat part of a bill that comes whether you use the service or not, can be shared with the other house instead of duplicating
• Deferred maintenance, which means the septic system, the roof, and the windows that a low listing price is financing for the seller
• Your own hours, which is what a fixer-upper will take from your weekends for the first several years you own the house
• Property tax on the land, which changes when you put a house on it, and is determined by the town assessor not the builder

Obviously your costs will be different but what applies to your situation is the list above and the reasons behind it.

What $425,000 Buys on the South Shore Right Now

Two working professionals moved back to the area where their families live, set a limit on price and started looking. Abby Creighton describes what the market was like: "Everything that was below like 450,000 required so much work to be livable that when you do the math, it was like way out of our budget."

One listing at $425,000 looked fine when they first walked through it. But on the second visit it wasn't. "Put a pen on the floor and it rolled all the way to the other side of the room," Abby said. "The house was slowly sinking." Terry Creighton said that the same house had a mechanics pit in the garage, the kind of feature that the handy owner added to it over many weekends.

The rest of that neighborhood was the same way. "All needed a new septic, new roofs, new windows," Abby said. "So even though they're on the market for four 25, when everything is said and done, you know, it's well over 500."

That last part is the true market situation and it is the same for the houses below $450,000 that we see families walk through on the South Shore. A listing price on a house with three failed systems isn't a price, it's a deposit on a not a price. It is a deposit on a project that han't been priced yet.

Why Do You Skip Private Mortgage Insurance on an ADU?

Because private mortgage insurance is attached to a purchase not to a building. It's what the lender has to have on a conventional loan when the down payment is less than 20 percent of the purchase price, and it protects the lender instead of the borrower. You can read how the requirement works at consumerfinance.gov.

Terry Creighton put it this way: "There are so many expenses that they do not have right now because it's a new home, but it's an ADU, so they don't have to pay PMI." She's paid it before, on the main house years ago. In her words, "that was a huge one when we first built our house."

An ADU on land your family already owns isn't a purchase of a separate lot, so the down-payment that kicks in the premium doesn't happen. We aren't talking about a specific loan for this ADU, because the way the financing works is different depending on the family and the lender. We're talking about a monthly payment that's present for one situation and isn't for another. Check current terms with your own lender before you do your comparison.

Which Monthly Bills Can You Share With the Main House?

Every utility bill has two parts: a base charge for having the service connected at all, and a usage charge for what you consume. When you buy a house on a separate lot you'll pay both parts twice, once at each different address forever. But if you put a second house on a lot that already has services then that base charge doesn't automatically double.

Terry Creighton says this: on trash: "We're sharing the trash pickup. I mean, even that's not cheap." On water: "There's a base bill that if you had an individual one that you'd be paying. On top of the usage. So we're just kind of splitting up all those things." The internet uses a wifi extender and runs off the main house. A second account costs about 80 to 100 dollars a month, which is our estimate of a typical bill, not the amount taken from this family's statements.

Those three charges are divided like this:

Whether your town lets you do a shared connection or requires separate metered service is a local question, and it's worth asking your building department early instead of late. Terry's summary of the pattern works both ways: "There's a lot of different places where they save money because it's in our backyard and not on a separate lot."

What Does a Cheap Listing Cost You After You Move In?

It costs cash, and it costs time. Buyers price the cash and forget the time involved.

Here's what we see that a buyer looking at a decent size kitchen doesn't. Deferred repairs on an older house aren't separate projects you can schedule around your budget. They are in a fixed order. Structure repairs come before finishes, because there isn't any point putting new windows into a frame that needs repair. The roof has to be done before anything underneath it, because water will destroy the work you just did. A failed septic system has to be done before site work, because the equipment that's brought in to replace it will drive across the yard you need to landscape.

So a listing that has three systems needing repairs isn't just a three weekend project. It's one project that has to be done in order and you can't pause part of the way through, in a house you're already living in. That order is why the repair cost on a cheap listing is much more than the sum of its parts, and it's why the maintenance costs on a new ADU will stay low for years, while the older house's curve starts out steep and stays there.

Both buyers in this story work full time, and that matters more than you might think. You don't get to have your weekends for the next three years, and the hours you do get have a real cost whether you spend them yourself or hire them out. Abby's thoughts after living in the finished unit: "If we were trying to buy a house on the market, we never could have gotten something of this quality for the price point."

When Would Buying a Starter House Beat Building an ADU?

We build these for a living, so you should consider what follows accordingly. There are three situations where the purchase is the better decision, and we'd rather discuss them here than have a family find one after a deposit.

• Ownership on paper. The ADU is on someone else's deed. If the person living there needs the title and the equity recorded in their own name, buying a house will do that and building a backyard ADU doesn't.
• Distance between households. Some families do better with some distance between them. Closeness is part of the result with an ADU and it's not necessarily right for everyone.
• Lot capacity. Setbacks, lot coverage, and septic capacity will determine if a second dwelling fits at all, and on some lots the answer is no. We tell families that before they spend money on design.

There is also a question we can't answer for you from this family's experience and that's the effect the finished ADU had on their property tax bill. Massachusetts assessors value real property at full and fair cash value each January 1, so adding an ADU changes what the parcel is assessed at, and the size of that change is a question that you will have to ask your own assessor's office. You can read how municipal property tax is set at mass.gov. Get that number before you plan your budget, because it needs to be considered along with everything else.

We also don't have a month of itemized bills from this ADU to show you. No utility statement, tax bill, or insurance figure are anywhere in this family's account, and we are not going to make one up to make the pages more complete. What their experience tells you is the comparisons, which is the part that matters to your property anyway.

Run the Monthly Math on Your Own Property

Two working professionals couldn't find a house on the South Shore under $450,000 that was worth owning, and the cheaper the listing, the longer the list of repairs there were for it. On a lot their family already held, three fixed charges were shared instead of duplicated, and the insurance premium never showed up at all. That's the comparison that decides this question, and it's one you can start doing this week with your own water bill, your trash arrangement, and one call to your assessor.