What is an in-law suite? It’s the most common name for a small dwelling on the same property as (and perhaps attached to) a single-family home, where an aging family member (or others) can live with some modicum of privacy and independence.

In-law suites are also referred to as accessory dwelling units, multigenerational units, secondary suites, or granny flats. In Hawaii, they’re known as ohana units. In the Southwest, they’re frequently called casitas. No matter the name, they’re a desirable feature in a home that come in handy in many ways well beyond providing a place for mom alone. Here’s everything you need to know.

What is an in-law suite?
The traditional in-law suite can be either connected to the main dwelling of the home, or an external structure like a small cottage on the property or a converted garage. Minimally, an in-law suite has a bedroom and full bath. It can also have additional rooms such as a sitting room or a small kitchen.

Alternate uses for in-law suites
When not in use by an aging parent, an in-law suite has many uses, making it a wise investment. Here are some uses to consider:

Home office: “More and more buyers are looking for a place to work from home,” says Mike Dinella, broker salesperson with Lenny, Vermont & Leonard Realtors in Haddonfield, NJ. “So an in-law suite could be the perfect spot for your small business.”
Guest quarters: When out-of-town guests come to visit, an in-law suite is the perfect place for them to have a little privacy with their own bedroom and bathroom.
Older child residence: Adult children who may need to live at home while establishing themselves financially can use the space as an apartment, perhaps even paying a little rent.
Short- or long-term rental apartment: Since many in-law suites are fully equipped apartments, they make ideal rental apartments that can bring in added income from long-term renters or short-term rentals on Airbnb.
What’s the cost of an in-law suite?
The cost to add an in-law suite will vary greatly depending on the size, amenities, and whether it will be an addition to an existing home or a stand-alone structure. When adding an in-law suite to the existing home, look to spend an average of $32,700 to $63,000. If you’re building a new structure, it can cost as much as $125,000.

In-law suites as a sales feature
Due to their usefulness, in-law suites are attractive features to look for when buying a home—or play up in your home if you’re selling.

“A mother-in-law suite or even the potential of one can make your home more desirable to buyers,” says Dinella. “With multigenerational living on the rise, buyers are frustrated that they can’t find a home that meets their needs. There are limited choices, so they start looking at homes that can be easily modified into a residence with a mother-in-law suite. If I have a listing with a first-floor bedroom and full bath, I’ve been advertising it as a ‘potential in-law suite.’ It generates a lot more buyer traffic.”

The best advice Dinella has for those who are considering building an in-law suite onto their existing home out of necessity is to make it an open floor plan.

“An open floor plan has versatile uses after the fact. It’s easier for buyers to envision the suite as something else if they don’t need to use it for its original intention,” he says.

Are in-law suites legal?
Local ordinances vary when it comes to the amenities in an in-law suite and its use. To find the laws specific to your property, go to the zoning office with your lot and block number to find out if having such a suite on your property is permitted.

If zoning laws do not allow an in-law suite, it may be possible to get a variance.

“You may have to send out certified letters to the neighbors and get their signatures,” says Dinella. “The cost of a variance could run up to $500.”

You will also need to obtain building permits—and even then, there may still be limitations on what the suite can include or how it may be used. Some zoning laws do not allow full kitchens because of the risk of stove fires. Some laws do not allow the suites to be rented out once it’s no longer being used for an older relative.

Bottom line: Before investing in a home with an in-law suite with the intention of it being a money maker, know the local laws.

Despite a few negatives, homeowners find the pros outweigh the cons and that in-law suites are a smart investment while they are living in the home and when they go to sell.