Duplex vs ADU: Which Is the Smarter Investment for Your Property?
If you’re looking to add value, generate rental income, or create flexible living space, you’ve likely come across two popular options: duplexes and ADUs (Accessory Dwelling Units). While both can be excellent investments, they serve different goals, budgets, and property types.
At Peer House Design LLC, we help homeowners, builders, and investors choose the right plan for their land, lifestyle, and long-term strategy. Let’s break down the differences so you can decide which option makes the most sense for you.
What Is a Duplex?
A duplex is a single structure that contains two separate dwelling units, typically side-by-side or stacked, each with its own entrance, kitchen, living spaces, and utilities (depending on local codes).
Pros of a Duplex
Higher rental income potential than a single-family home
Efficient land use, especially on urban or infill lots
Appeals to investors looking for long-term cash flow
Can be owner-occupied with one unit rented out
Cons of a Duplex
Higher upfront construction costs
May require multifamily zoning approval
Larger footprint than a single-family home or ADU
Best for:
✔ Investors
✔ Builders
✔ Owner-occupants who want rental income
✔ Lots zoned for multi-family or higher density
What Is an ADU?
An ADU (Accessory Dwelling Unit) is a secondary living space located on the same lot as a primary residence. ADUs can be detached backyard cottages, attached additions, or even garage conversions.
Pros of an ADU
Lower construction cost than a duplex
Ideal for multigenerational living
Great for short-term or long-term rentals
Often easier to permit in residential zones
Cons of an ADU
Smaller square footage limits rental income
Subject to strict local regulations
Typically cannot be sold separately from the main home
Best for:
✔ Homeowners
✔ Aging-in-place families
✔ Backyard rental income
✔ Smaller or already-developed lots
Which Option Is Right for You?
Ask yourself:
Do I want maximum rental income or flexible living space?
Is my lot zoned for multi-family construction?
Am I building as an investor, homeowner, or both?
What is my budget and timeline?
👉 If your goal is cash flow and resale value, a duplex often wins.
👉 If your goal is family flexibility or passive income, an ADU may be the better fit.
Explore Duplex & ADU Plans Designed to Build Smart
At Peer House Design LLC, we specialize in pre-designed duplex and small multi-family plans that are build-ready, code-conscious, and designed for real-world budgets. Our plans help you save time, reduce design costs, and move confidently from idea to construction.
Ready to compare plans or explore your options?
👉 Browse our duplex designs
👉 Browse our ADU designs
Smart design starts with the right plan.