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Utah Business

New accessory dwelling laws mean you can finally build that investment property in your own backyard. Here's how.

Put An Investment Property In Your Backyard

With a growing housing shortage, more and more homeowners are finding creative ways to earn extra money using space they already own. Isabel Wagner and her husband make $10,000 a year renting out an in-law unit in their backyard. And thanks to a new housing ordinance, we can all do the same. 

After nearly a decade in the works, Salt Lake City has finally joined many other US cities passing new accessory dwelling unit (ADU) housing ordinances. That ordinance means that local residents can now build smaller accessory residential units—oftentimes referred to as granny flats, mother-in-law apartments, or tiny homes—on their properties. 

These small but practical living spaces are part of a range of housing types that can help increase the housing supply without majorly impacting existing neighborhoods―all while providing an additional financial incentive for homeowners who wish to rent out their unit permanently or as a vacation rental. 

Build Your Own ADU

Building a new ADU―or converting an existing space into one―is a smart investment for anyone looking to help pay their mortgage, make a little extra money, or simply help out a friend or family member. And with the rise of popular vacation rental sites such as Airbnb and VRBO, there are endless opportunities to do just that.

New accessory dwelling laws mean you can finally build that investment property in your own backyard. Here's how.

In the past, ADUs were set to only be built within very specific boundaries, causing several groups in Salt Lake City to note that under state law, the proposed ADU boundary would be illegal as it favored affluent neighborhoods over lower-income neighborhoods. 

But now, the current ordinance no longer includes a proposed boundary, meaning ADU’s can be built citywide. However, there are still a set of guidelines that focus on parking, building footprint, and property ownership requirements. According to the ADU Handbook, every neighborhood in Salt Lake City falls within a specific land-use zone. To build an ADU, your current home must be located in a residential zone and your property must contain a single-family home, townhome, or rowhome. From there it has to meet a number of specifications. 

Whether you are converting part of your existing home, adding an attached or detached unit to your home, or converting space above or part of your garage, all builds must adhere to specific building coverage guidelines that determine the percentage of the lot covered by the principal home and the accessory buildings. 

The size of the ADU cannot exceed 50 percent of your home’s footprint―not including the square footage of your detached garage―or up to 650 square feet, whichever is less. All accessory buildings in the rear yard cannot cover more than 50 percent of the space between the rear wall of your home and the rear property line.

Other requirements include parking regulations, such as providing a minimum of one parking space in addition to existing parking on your property; and living regulations, stating the property owner or an owner’s family member, must live either in the principal home or the ADU. 

In addition to these and other zoning ordinances, ADUs are subject to building code requirements, require sign-off by a licensed contractor, and must meet regulations that apply to all new buildings and additions to buildings. These codes may add significant construction costs.  

Because of this, the Salt Lake City Planning Division recommends meeting with the City’s Building Services Division to discuss applicable building code requirements that may make it costly to build an ADU. For more information and to check your eligibility, visit the Salt Lake City Zoning Lookup Map at

Buy A Turn-Key Tiny Home

The new ADU ordinance comes with extensive guidelines homeowners must follow, but for those who want a turn-key option, Modal Living has created just the thing. Modal 01 is a prefabricated home that can be plopped into any backyard―free of hassle. 

Designed to give homeowners additional living space, as well as the opportunity to generate extra income without extending a property’s footprint, the unit is built for backyards, complies with ADU specifications, and can be delivered to any home. 

Want to get your hands dirty yourself? Another company that made news recently is Allwood Outlet’s DIY version of ADUs. AllwoodOutlet is an online retailer of eco-friendly Millwork and engineered wood products manufactured and imported from Scandinavia and the Baltic States.

New accessory dwelling laws mean you can finally build that investment property in your own backyard. Here's how.

Their Amazon shop is now selling the DIY backyard unit that you can build yourself in as little as eight hours. With a price tag of $9,990, this kit comes with everything homeowners need to build their own 227-square-foot addition and an extra kit to install a bathroom. 

There are many styles of ADUs that Utahns can start to take advantage of. But before you park your Airstream or check out on Amazon, there are some specific guidelines the city of Salt Lake requires homeowners to meet. 

Park Your Trailer In Your Backyard

Don’t qualify for building or converting an ADU? Ben Stalker, an environmental design director at Coel Studio, found another solution. Mr. Stalker purchased a home in Salt Lake City in 2018, but before that, he lived in an Airstream trailer. “I lived in my Airstream for five years before I purchased my home [in 2018],” he says. “So when I moved into my new house I pulled my old ‘house’ into the backyard and rented it almost immediately.” 

Mr. Stalker had no plans to rent his Airstream so quickly after purchasing his home, but he had a friend in need of a place to live. “I was happy that it was going to get used and not just sit empty in my yard, although an Airstream is always a classy addition to any backyard!” 

According to Salt Lake Building Services, parking trailers such as an Airstream in the rear yard is allowed―though they aren’t considered an ADU―as long as it follows a few guidelines. 

The trailer must be owned by the principal resident and parked in the rear yard only on adequate hard surfaces such as a driveway, drive strips, or an area constructed of turf block materials. You cannot park in an area that is the only space for parking other vehicles, such as the side of a driveway or the side of a carport. 

New accessory dwelling laws mean you can finally build that investment property in your own backyard. Here's how.

In addition, trailers must be screened from the front or street side at the rear line of the principal building with a six-foot-high fence and a gate for access. And of course, access to proper water and bathrooms are a must. A water hook-up and either sewage hook-up or access to bathrooms on the property are necessary to allow rentals. 

As far as rent goes, Mr. Stalker tries to figure what is fair for friends staying in the trailer, “I try and help my friends out who are needing a short-term rental, so I ask them what it is fair and it usually ends up being a good thing for both of us. I’d say in total I’ve made a few thousand dollars.”

As Salt Lake continues to rise in popularity and population, taking advantage of the modern mother-in-law apartment is the answer. With more residents struggling to afford current housing rates, or simply preferring not to live in an apartment, it is likely that more and more towns and cities in Utah will begin to allow ADUs.