ADU Rental Income in Greater Boston: What Homeowners Actually Earn

The spreadsheet is what convinces most Massachusetts homeowners to build an ADU. Greater Boston has some of the highest rents in the country, a chronic shortage of small units, and a new state law that lets you add one to your backyard by right. Here's the honest math.

What ADUs Rent For in Greater Boston (2026)

• Studio ADU: $1,700–$2,200/month
• One-bedroom: $2,000–$2,800/month in Somerville, Medford, and comparable markets; higher near transit
• Two-bedroom (750–900 sq ft): $2,600–$3,400/month

The Payback Math

Take a $160K garage conversion renting at $2,400/month. That's $28,800/year gross — a decade to gross payback, faster after you count the property value increase, and dramatically better than what that $160K earns elsewhere on a risk-adjusted basis. A $350K detached cottage at $3,000/month is a longer runway on rent alone, but detached units also add the most appraised value.

The Rules You Must Follow

• No short-term rentals. The state ADU law prohibits stays under 31 days. Airbnb is off the table; travel nurses on 3-month contracts are not.
• Standard landlord obligations apply: lead paint (pre-1978 units), security deposit rules, and habitability codes.
• You don't have to live there. Towns cannot impose owner-occupancy — both units can be rentals.

Property Value & Taxes

Appraisers increasingly value ADUs on income approach in strong rental markets — expect your assessment (and property tax) to rise, typically far less than the rental income. A legal, permitted unit with a certificate of occupancy appraises; an unpermitted one is a liability at sale.

Wondering what your lot could earn? Our ADU team pairs feasibility reviews with realistic rent comps, and our financing guide shows how rental income offsets the loan.