How Much Does it Cost to Build a Guest House?

Building a guest house is a perfect way to provide guests with a private, comfortable space. Invite friends for extended stays without worrying you will get sick of each other. Host your in-laws without pulling out your hair.

These days, the uses go beyond just guests. Some people use the guest house to put up adult children who are down on their luck or transitioning from one place to another. Others use it as a rental property to generate extra income.

About Guest Houses

Some guest houses are traditionally-built structures. Others are modular, meaning most of the construction takes place in a factory and only the foundation and finishing work are completed on site. Modular guest homes are popular because they are far less expensive, but there are some limitations to design and size. Guest houses are commonly referred to as ADUs (accessory dwelling units).

Most modular guest homes are between 600 and 1,500 square feet in size, with one or two bedrooms, a living space and a kitchenette or larger eat-in kitchen. Site-built guest homes can be much larger, particularly in high-end neighborhoods.

Before you start thinking about pricing and floor plans, do some research to find out if local zoning and property laws even allow you to build a guest house. Most cities and towns place restrictions on how large your property must be, how large the guest house can be and how close the structure can be to roads, neighbors, etc.

Even if local rules allow the structure, you will most likely have to submit plans to your local planning or zoning board, then wait for formal approval.

Cost to Build a Guest House

The average modular guest house with about 1,000-1,200 square feet of space costs $70,000-$80,000 to build and install.

Site-built guest houses vary dramatically in price depending on size, layout, materials, finishing options and your location. You could spend anywhere from $100-$500 per square foot to have the guest house designed, built and finished.

Modular guest houses start at about $30,000-$40,000 for 600-700 square feet. That does not include permits, the foundation and installation, which add about $15,000-$25,000. Add-ons such as porches and decks run extra, too.

It’s important to note that guest houses often do not produce a high return on investment (ROI), unless you live in a high-end neighborhood where they are very common. When you go to sell the house, chances are you won’t get a dollar-for-dollar return.

However, most people who build guest houses are focused on creating a comfortable environment, not boosting resale value. They also tend to be people who are planning to stay in their homes for many years, making ROI less important.

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