Updated August 17, 2026. This material is general appraisal information and is not legal, tax, engineering or accounting advice.
Describe the physical setup
The appraiser considers access, kitchen facilities, bathrooms, sleeping areas, utilities, privacy, connection to the main dwelling and whether the space is above grade, below grade or detached.
Labels such as in-law suite, apartment and ADU are not interchangeable without supporting facts.
Research legal and zoning context
Permits, certificates, zoning rules and occupancy limitations can affect marketability and use. The appraiser may need municipal information or client direction when the legal status is unclear.
The appraisal should not assume that physical use establishes legal use.
Identify the likely buyer benefit
Some buyers value multi-generational living, guest space, caregiver housing or rental potential. Others may see duplicated kitchens or altered layouts as unnecessary.
Market contribution depends on demand, quality, privacy, operating costs and the availability of comparable alternatives.
Avoid automatic two-family classification
A home with a second kitchen is not automatically a legal two-family property. Classification requires analysis of design, use, legal status and the intended assignment.
Clear property records and photographs help prevent the wrong comparison set.
Property and assignment checklist
- Document entrances and interior connections
- Identify all kitchens and bathrooms
- Provide permits or municipal records
- Explain utility metering and heating
- Clarify current and intended use
- Identify lease terms if occupied
- Compare with properties offering similar flexibility
Frequently asked questions
Does an ADU always increase value?
No. It may add value when legal, functional and desired by buyers, but poor layout, uncertain status or over-improvement can limit contribution.
Is rental income always used?
Not in every assignment. The property type, intended use, legal status and available market evidence determine whether income analysis is relevant.
Can a basement apartment be included?
It can be analyzed, but below-grade location, access, light, egress, legal status and market demand all matter.
What documents are useful?
Permits, certificates, floor plans, leases, utility information and a clear description of current use can help define the assignment.
Send the property address, intended use, effective date and any unusual features so the assignment can be reviewed before scheduling.
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