Accessory Dwelling Units, or ADUs, are getting attention nationwide, but in Sandpoint, they take on a personality of their own. While big-city markets often focus on rental income, most homeowners here think about ADUs in a more personal way.
What Is an ADU?
An Accessory Dwelling Unit, or ADU, is essentially a small secondary home on the same property as a primary residence. Around Sandpoint, you’ll often hear people call them by different names, a guest house, a mother-in-law suite, or even a backyard cottage. Whatever you call it, the idea is the same: a fully functioning living space with its own kitchen, bathroom, and living area, but built on a smaller footprint than the main home.
In Sandpoint, most people imagine an ADU as a detached, standalone building. While it’s possible to create something attached, like a basement apartment or a unit above a garage with its own private entrance, that setup is much less common here. Detached backyard ADUs are by far the most popular.
And unlike RV hookups, tiny homes on wheels, or rustic guest cabins, a true ADU is designed to meet residential building standards and provide full-time housing. Depending on the size, some ADUs are open-concept studios with the bedroom and living space combined, while larger ones, closer to the 900-square-foot cap, often include one to two bedrooms and one to one and a half bathrooms.
Where ADUs Make Sense in Sandpoint
If you’re dreaming about building an ADU in a brand-new subdivision, the odds aren’t in your favor. Smaller lot sizes and CCRs often make it tough. But in-town Sandpoint lots, especially those with alley access, are ideal. And rural acreage in places like Sagle, Dover, and Hope opens up even more opportunities. These properties usually have the space and utility access needed to make an ADU work without overwhelming costs.
How Big Can an ADU Be?
Bonner County and the City of Sandpoint both allow ADUs, but there are size limits. By code, an ADU can be up to 900 square feet. On larger parcels, you may apply for a variance to stretch that to 1,100 square feet, but in most cases, 900 is the cap. The good news is that Sandpoint and Bonner County are actually in favor of more ADUs, and the approval process is straightforward compared to other regions.
The Real Hurdle, Costs and Builders
While many assume permits will be the biggest challenge, the real hurdle in Sandpoint is construction cost and builder availability. Labor is in high demand, materials fluctuate in price, and the best contractors often book out months in advance. That doesn’t mean your ADU can’t happen, it just means planning and picking the right builder matters more than anything.
Who Can Build Your ADU in Sandpoint?
If I were hiring today, my first call would be to CMT Construction. They’re a smaller operation run by Leroy and Rylen, and their attention to detail is second to none. You can reach them directly at 208-304-8139. They bring a personal touch to every project, and I know from experience that they care deeply about the final product.
For those who want the reassurance of a bigger operation, Idagon has been building in the Sandpoint area for decades. They’ve earned a reputation for quality work, and their long track record speaks for itself. Both are excellent choices, and it really comes down to whether you value the hands-on approach of a small team or the resources of a larger one.
Lessons From the General Contractor’s Chair
I’ve personally general-contracted a home build here in North Idaho, and I’ll be honest, it’s not simple. Bonner County has no county building code, which means some contractors cut corners. But if they hold a license, they’re still required to follow the International Residential Code. That’s why I always encourage people to interview multiple trades, electricians, plumbers, framers, concrete crews, and make sure every agreement is in writing with a clear statement that the work will meet current IRC standards.
Engineered plans are a must, and once you have them, sit down with your key trades and make sure you’re all on the same page before anyone breaks ground. Pricing out fixtures on your own, from lighting to kitchen finishes, helps keep costs predictable. And speaking of costs, it’s smart to set aside extra funds, because in construction prices rarely sit still. Concrete and lumber, in particular, tend to move with the market, and it’s better to have a cushion than be caught short.
For anyone brave enough to act as their own GC, I always recommend picking up Brian Daniels’ book, How to Select and Manage Your Contractor 101. Brian is a local who has been building in North Idaho for more than 30 years, and his book is one of the best guides I’ve seen for homeowners who want to take a more active role in the process.
It may sound intimidating, but with preparation and the right people, building an ADU can be one of the most rewarding projects you’ll take on.
How to Finance an ADU
Building an ADU is exciting, but the question always comes up, how do you pay for it? The good news is there are several paths to consider depending on your financial situation and goals.
Some common options include:
Existing Savings – The simplest way to fund a project if you’ve set aside the money.
Home Equity Loan or HELOC – Borrow against the equity you’ve already built in your home.
Cash-Out Refinance – Refinance your primary mortgage and pull out cash to cover construction.
Second Mortgage – Another way to tap into your property’s equity with a separate loan.
Renovation Loans – Mortgage products designed specifically for building or improving a property.
Construction or Personal Loans – Short-term financing that can later be refinanced.
Reverse Mortgage – A possible option for older homeowners who want to access equity without monthly payments.
Private Money – In some cases, individuals borrow from private investors or family to fund construction.
Because every situation is unique, I highly recommend reaching out to Sean Cramer with Highlands Mortgage at 425-802-2507. Sean is excellent at walking homeowners through these options, explaining the pros and cons, and helping you find the path that makes the most sense for your goals.
Does an ADU Add Value to Your Home?
The short answer is yes, but in Sandpoint the value of an ADU shows up in more than one way. First, there’s the livability value. More and more families here are looking for space where parents can live close by, kids can have an affordable start, or guests can stay comfortably when they visit. That flexibility is something buyers notice right away, and it often makes a home stand out in our market.
From a resale standpoint, homes with ADUs tend to attract more interest and, in my opinion, often sell faster than comparable homes without one. Buyers see them as a second house on the property, and while they’re typically smaller, the additional space carries real weight in the decision-making process.
If you’re building mainly for ROI, it’s important to set realistic expectations. The cost of construction plays a big role. If you work with a fair-priced, quality builder and avoid going over the top on finishes, you can often see close to a dollar-for-dollar return. And, like anything in real estate, the longer you hold on to that new asset, the more appreciation builds over time, turning a solid project into a great investment.
Final Thoughts
Building an ADU in Sandpoint is less about square footage and more about lifestyle. It’s a way to bring loved ones closer, create flexibility for the future, and yes, even tap into some rental potential.
If you’re relocating to Sandpoint and love the idea of finding a property where you can add an ADU, or buying one that already has one, I’d be happy to help you navigate the options. And if you’re a local homeowner ready to explore building, I can point you toward the right builders and help you run the numbers.
👉 Browse homes for sale in Sandpoint with ADU potential
Thinking about adding an ADU, or buying a property with space for one? Let’s connect. I’ll help you understand what’s realistic, what it costs, and how to make sure it’s done right the first time.