More People Are Considering 'Granny Pods'—Here's How Much It Costs To Build One

In recent years, due to inflation and a shortage of nurses and service workers, paid care for aging loved ones has been escalating more and more. Whether in one’s home or at a facility, families have been finding it increasingly difficult to shoulder the costs. In fact, as U.S. News & World Report cited, the average annual cost of a private room in a nursing home is an astounding $108,000. 

A possible solution to these financial woes? The granny pod. Although its name sounds trite and amusing, these tiny homes on a loved one’s property may be the solution to caring for your elderly family members while maintaining a budget. 

“Being able to have a family member live on the property but with a bit of space and privacy can help alleviate some of those costs alongside convenience,” says Eddie Maestri, Principal Architect and Creative Director of Dallas’ Maestri Studio.

Lisa M. Cini, Founder of Mosaic Design Studio and a leading authority on interior design of senior living facilities, also weighs in, saying, “With the cost of senior living rising and desire for seniors to age in place at home, granny pods are a natural bridge that allows a senior to stay connected and age in place without breaking the bank. At a cost of between $40,000 and $250,000 to build a granny pod, you will break even in one to four years, compared to what you would spend for private pay senior living.” 

To learn about the ins and outs of grandma pods, flats or cottages (sometimes referred to as a "mother-in-law suite" as well), and to find out if it’s a good fit for you and your family member, read on.

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What Is a Granny Pod?

“A granny pod is best defined as an accessory dwelling unit,” says Laura Lynch, CFP, Founder of The Tiny House Adviser LLC, Financial Planning for Tiny Living Values.

“An ADU is a secondary living space placed or built on the lot of an existing primary dwelling. Though ADUs can be used for a variety of purposes, when used as a granny pod, ADUs provide a multi-generational support system for aging loved ones, family or friends.”

In general, a granny flat is built close to the main home. As a viable option for aging parents, Shelagh Conway, Principal and Founder of Triple Heart Design in Austin, Texas, says, “For some families whose parents are fit and healthy, this is a fabulous way to allow families to live near each other without the expense of two full-size homes. It can be a win-win for both parties and provide a beautiful space to transition through the later years of life.”

Typically, according to Maestri, these units have a full ensuite and a small kitchen and living room. It usually has a layout that is conducive to aging in place. Cini also points out that granny pods can be attached to the home through a breezeway. 

“There are a few reasons why granny pods are an excellent solution for families,” Lynch explains. “The granny pod allows individuals or families to provide direct support for their loved ones with less impact on their hectic, often mid-career schedule. By having loved ones nearby, family caregivers are able to spend more time supporting aging loved ones in a holistic way. For the aging person, there are many benefits as well. They have the option to be more integrated into their family’s lives, experience more family memories in person and participate in family chores and responsibilities.” 

Conway reflects, “Having experienced caring for my parents as they met their later years, I can tell you unequivocally that if I had the option to have them on my property with a granny pod, I would have done it in a heartbeat! It’s hard to integrate an elderly parent into your current space and most families just don’t have the room, but housing them in a facility or care home isn’t always the best option.” 

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How Is a Granny Pod Different from a Traditional Home?

Generally, a granny pod differs from a traditional home since it’s smaller, placed or built on the lot of an existing primary residence, and designed to house only one to two people in an accessible way, as Lynch details. A granny pod is basically a single-story mini version of a home that contains all the necessities one would need.

“Think of a granny pod or ADU as a cute summer cottage that you can use all year round,” Cini says. Lynch notes that typically, the living space of a granny pod comes in under 1,000 square feet.

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How Much Does It Cost to Build a Granny Pod?

As Cini mentioned, the cost of building a granny pod can be between $40,000 and $250,000, which goes to show that the numbers can vary quite a bit depending on multiple factors.

“The cost of building a granny pod varies based on whether the unit is built on-site or off-site,” Lynch explains. “On-site construction costs of ADUs range across the country roughly from $200 to $300 per square foot. This is more than the average for residential construction because a granny pod packs many of the high-cost items such as appliances, heating and cooling into a smaller package.”

Lynch goes on to say, “From my perspective as a financial planner, the cost of a granny pod may be considered in light of the cost of in-home care. The 2023 national average cost of homemaker services exceeded $60,000 per year for eight hours of care a day. The average care need is over two years for men and over three years for women.”

Also, keep in mind that your location will impact the bottom line. As Cini says, a granny pod in southern California will cost more to build than in the Midwest typically. 

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Where Can You Buy or Rent a Granny Pod?

Lynch says, “Local builders across the country are already well versed in their local zoning and building codes. Therefore, finding a local licensed contractor who specializes in ADUs may be a good first step for an on-site construction project.”

Cini adds that you can both buy and rent a granny pod. She explains, “You can rent granny pods for about $2,000 a month, which is comparable to a cost-effective option to independent living.”

Modular home companies and even Amazon are options for buying a granny pod outright, and more and more companies are also offering rental options, so be sure to do your homework and look for renting opportunities in your area.

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Are Granny Pods Legal?

“This is the big question that has so much nuance,” Lynch says. “The first step in considering a granny pod is to contact your local building department to ask if the granny pod arrangement you are considering is allowed. Information to bring to that conversation includes the square footage that’s expected and details of construction: on-site, off-site, tiny home on wheels, RV, intended connection to utilities, whether the unit will be rented and who will own the unit.”

You should also ask these key questions as listed by Lynch:

• What is the permit process?
• Is a certificate of occupancy required?
• Where can I find details of the required building specifications?
• How do I legally connect to utilities?

“It cannot be stressed enough how important it is to check with your governing jurisdiction and your HOA, if you have one, to see what is allowed within each jurisdiction,” Lynch says. “If you learn that ADUs, granny pods and tiny homes are not allowed, you can then work within your community to influence a change in the laws.” 

Next up, More People Are Considering Shipping Container Homes as Housing Costs Rise—Here’s How Much It Costs To Build One

Expert Sources

• Eddie Maestri, Principal Architect and Creative Director of Maestri Studio.
• Lisa M. Cini, Founder of Mosaic Design Studio.
• Laura Lynch, CFP, Founder of The Tiny House Adviser LLC.
• Shelagh Conway, Principal and Founder of Triple Heart Design.
• U.S. News & World Report: “Nursing Home Costs and How to Pay”
• Genworth: “Cost of Care Survey”