Austin’s housing market is booming, and homeowners are increasingly turning to accessory dwelling units (ADUs) to maximize their property’s potential. Whether you’re looking to create a rental unit, a home office, or extra living space, one of the biggest decisions you’ll face is choosing between a prefab ADU or a custom-built one.
But which option makes more financial sense? How does prefab ADU cost in Texas compare to a fully custom design? And if you already have a garage, could a custom garage conversion be the smarter move?
In this guide, we’ll break down the costs, benefits, and key considerations so you can make the best choice for your budget and goals.
Prefab ADUs: Speed and Affordability
What Is a Prefab ADU?
Prefab (prefabricated) ADUs are factory-built structures delivered to your property and assembled on-site. They come in various styles, from modern studios to rustic backyard cottages.
Average Prefab ADU Cost in Texas
Prices vary based on size and finishes, but here’s a general range:
- Basic Studio (300–500 sq ft):
- 80,000–
- 80,000–120,000
- 1-Bedroom (500–800 sq ft):
- 120,000–
- 120,000–180,000
- High-End Modular (800+ sq ft):
- 180,000–
- 180,000–250,000+
Pros of Prefab ADUs:
✔ Faster installation (weeks vs. months)
✔ Predictable pricing (fewer surprise costs)
✔ Modern, energy-efficient designs
Cons of Prefab ADUs:
✖ Limited customization options
✖ May require crane delivery (depending on site access)
✖ Some HOAs restrict prefab structures
Best For:
- Homeowners who want a quick, turnkey solution
- Those with simple, flat lots
- Investors looking for a fast rental ROI
Custom-Built ADUs: Tailored to Your Needs
What Does a Custom ADU Entail?
A custom ADU is designed from scratch, whether it’s a new standalone structure or a custom garage conversion. This option offers complete flexibility in layout, materials, and features.
Cost of Custom ADUs in Austin
Since every project is unique, costs fluctuate more than with prefab. Here’s a rough estimate:
- Garage Conversion:
- 60,000–
- 60,000–150,000
- New Construction (500–800 sq ft):
- 150,000–
- 150,000–300,000+
Pros of Custom ADUs:
✔ Unlimited design possibilities
✔ Better integration with your existing home
✔ Higher perceived value for resale
Cons of Custom ADUs:
✖ Longer timeline (6–12+ months)
✖ More risk of budget overruns
✖ Requires permits, contractors, and more oversight
Best For:
- Homeowners with specific design needs
- Those converting existing spaces (like garages)
- Luxury properties where high-end finishes matter
Garage Conversions: A Hidden Gem for Cost Savings
If you already have a garage, a custom garage conversion can be one of the most cost-effective ways to add an ADU.
Key Benefits of Garage ADUs:
- Lower foundation costs (existing structure)
- Faster permitting (often simpler than new builds)
- More discreet (blends with your home’s aesthetic)
Cost Breakdown:
- Basic conversion (minimal changes):
- 40,000–
- 40,000–80,000
- High-end conversion (full kitchen, bath):
- 80,000–
- 80,000–150,000
Tip: If your garage is detached, you’ll have more flexibility in layout. Attached garages may require extra soundproofing.
Which Option Gives the Best ROI?
Prefab ADUs
✅ Faster rental income (can be rented sooner)
✅ Lower upfront risk (fixed pricing)
✅ Appeals to modern renters (sleek, move-in ready)
Custom ADUs & Garage Conversions
✅ Higher resale value (tailored to buyer preferences)
✅ More functional long-term (perfectly fits your needs)
✅ Better space utilization (no wasted square footage)
Verdict: If you need speed and predictability, prefab wins. If you want maximum customization and long-term value, custom is the way to go.
Key Factors to Consider Before Deciding
- Budget – Prefab is usually cheaper upfront, but custom can add more value.
- Timeline – Need it fast? Prefab is quicker.
- Zoning Laws – Some Austin neighborhoods have ADU restrictions.
- Future Plans – Will you rent it out, use it for family, or sell later?
Final Thoughts: Which ADU Is Right for You?
There’s no one-size-fits-all answer—it depends on your goals, budget, and property.
- Choose prefab if you want a fast, low-hassle solution.
- Go custom if you’re willing to invest more for a perfect fit.
- Consider a garage conversion if you want to save money and repurpose existing space.
Ready to Explore Your ADU Options?
Consult with a local Austin ADU builder to discuss your project. Whether you go prefab or custom, adding an ADU could be one of the smartest investments you make in your home.
