ADU Rental Income Calculator

How to Use the ADU Rental Income Calculator

A backyard accessory dwelling unit can turn unused yard space into steady income. This ADU rental income calculator shows whether the numbers work on your property before you spend a dollar on plans. Enter your all-in build cost first — the price of the casita plus design, permits, site work and utility connections. If you are not sure, the tiny home cost calculator will give you a realistic range for an ADU in Texas.

Next, tell the calculator how you will pay. If you finance, set the down payment, rate and term to match the loan you expect, such as a HELOC, cash-out refinance or construction loan. If you pay cash, the cash-on-cash return equals your return on the full build cost.

Long-Term vs Short-Term Rental

Long-term rentals (6 to 12-month leases) offer predictable income and less work. Enter a realistic monthly rent for a studio or one-bedroom in your area and a vacancy allowance — 5% is about two to three weeks empty per year.

Short-term rentals through booking platforms can earn more per month, but income swings with seasons and local events, and you pay for cleaning, supplies, platform fees and more of your own time. Occupancy is the share of nights booked; 50% to 70% is a common planning range for a well-reviewed unit. Important: many Texas cities regulate short-term rentals with permits, occupancy limits, hotel occupancy taxes or outright restrictions in some zones, and HOAs may ban them. Check the rules for your address before you count on short-term income.

Understanding the Results

• Monthly cash flow is what is left after operating expenses and the loan payment. Positive cash flow means the ADU pays for itself; negative means you are subsidizing it while it builds equity.
• Cash-on-cash return divides annual cash flow by the cash you actually put in (your down payment). It is the best quick measure of how hard your money is working.
• Simple payback divides the full build cost by annual net operating income (income minus expenses, before loan payments). It answers, "How many years of rent does it take to cover what I spent?"

Not included: the increase in your property's market value, tax deductions such as depreciation, rent growth and the personal value of housing a family member. In many cases those are the biggest benefits of all. Property taxes deserve special attention in Texas — an ADU increases your appraised value, and income-producing units may not receive the same homestead treatment as your main house. Ask your county appraisal district or a tax professional for specifics.

Ready to see what fits on your lot? Cowboy Tiny Homes designs ADUs, casitas and granny flats across Texas, and every design package starts with a feasibility study that checks zoning, setbacks and utility access for your address.