Want to offset your mortgage in Kirkwood without sacrificing comfort or privacy? Adding an accessory dwelling unit, or ADU, can be a smart way to house hack while you live on site. You get long-term flexibility, potential rental income, and added property value if you plan it right. This guide walks you through what Kirkwood allows, how to budget, and the steps to get from idea to income. Let’s dive in.
ADU basics in Kirkwood
Kirkwood permits ADUs on single-family lots with specific limits. You must live on the property while both units are occupied. Review the city’s standards before you sketch a design or call a builder. You can read the ADU section of the municipal code for details on what is allowed and what is not.
Key limits to know
House hack options
You can live in the main home and rent the ADU, or live in the ADU and rent the main home. Renting both while living elsewhere is not allowed under the owner-occupancy rule. If you plan short-term rentals, Kirkwood requires specific approvals, an occupancy permit, and a business license.
Short-term rentals in Kirkwood
- Short-term rentals require zoning and occupancy approvals before advertising, plus a business license. Review the city’s rules for short-term rentals and occupancy. Kirkwood short-term rental rules
ADU types and costs
Your build path will drive both budget and timeline. Conversions tend to be faster and less costly than new detached units. Midwest construction costs are often lower than coastal markets, but design review and site work can add to soft costs in Kirkwood.
Common build paths
- Garage conversion: Often the least expensive because the shell exists. Industry sources put typical ranges around $60,000 to $180,000 depending on scope and systems. Garage conversion cost overview
- Basement or attic conversion: Moderate cost due to egress, waterproofing, and mechanical upgrades.
- Attached or above-garage ADU: Mid to higher range based on size and finishes.
- Detached ADU: Highest cost due to foundation, utilities, and separate systems.
Hidden and soft costs
- Architecture and engineering
- Application materials for Architectural Review Board or Landmarks Commission
- Utility work and meter arrangements
- Permit fees, inspections, and builder’s risk insurance
- Contingency for unforeseen site conditions
Kirkwood permits and review
Plan for a clear sequence: confirm feasibility, complete design, secure approvals, then build and get an occupancy permit. Starting with a pre-application discussion can save time and redesigns.
Step-by-step overview
- Confirm feasibility: Verify zoning, lot size, setbacks, and any historic or landmark status. Kirkwood’s ADU standards
- Design and ARB review: Exterior changes and detached ADUs typically require Architectural Review Board review. Historic properties trigger Landmarks Commission review too. Architectural Review Board procedures
- Permits and inspections: Use licensed contractors and pull permits for structural, electrical, plumbing, and mechanical work. You will need final inspections and an occupancy permit before a tenant moves in. Kirkwood Building Division permits
Financing your ADU
If you plan to live on site and rent the ADU, some lenders may count projected ADU rent when qualifying you for a mortgage or renovation loan. FHA updated its policy in 2023 to allow a portion of estimated ADU income in qualifying for certain loans, including some 203(k) rehab scenarios. Lender rules and overlays vary, so confirm the details early.
- FHA policy update: Review the HUD announcement on ADU income and qualifying rules. HUD FHA ADU policy update
- Renovation loans: Ask about FHA 203(k) or other renovation products if you are building or converting an ADU.
- Pro tip: Request an appraisal with a market rent schedule and gather rental comps to support your file.
What the numbers could look like
As a simple example, if an ADU in Kirkwood rents for $1,200 to $1,800 per month, that is $14,400 to $21,600 in gross annual income. Against a conservative build cost in the $120,000 to $250,000 range for many projects, the payback is not instant, but it can significantly offset your mortgage and boost long-term value. Your net results depend on financing terms, vacancies, maintenance, insurance, taxes, and how you manage the property.
Risks and compliance to plan for
Insurance and liability
- Standard homeowners policies may not cover a rented ADU without an endorsement or landlord policy. Ask your insurer about proper coverage and consider umbrella liability. ADU insurance basics
Taxes and assessment
- Adding an ADU or converting space can increase your assessed value and property taxes. Multiple taxing districts apply in Kirkwood. Review the district’s published tax rates to estimate impacts. Kirkwood School District tax rate update
Landlord rules
Short-term rental compliance
- If you intend to use an ADU for short-term rentals, you must secure the required approvals and a business license before listing. Kirkwood short-term rental rules
Quick feasibility checklist
Building and renting an ADU in Kirkwood is doable with the right plan. If you want help evaluating a lot, estimating rent, or weighing your financing options, connect with the local team that blends design sense with proven market strategy. Reach out to Medelberg Savage Group to talk through your goals and next steps.
FAQs
Are ADUs allowed in Kirkwood for house hacking?
- Yes. Kirkwood permits one ADU on a single-family lot with owner occupancy, a 750 square foot size cap, and other design and parking standards.
What is the minimum lot size for an ADU in Kirkwood?
- You need at least 15,000 square feet to add an ADU on a single-family lot in Kirkwood.
Can I rent both the main house and the ADU while I live elsewhere?
- No. Kirkwood requires the property owner to live on the lot in either the main home or the ADU while the other unit is occupied.
How much does it cost to build an ADU in Kirkwood?
- Costs vary by type, but many garage conversions start around tens of thousands of dollars, while detached builds often run into the low to mid six figures.
Will FHA let me use ADU rental income to qualify for a mortgage?
- Often yes, subject to limits. FHA policy allows lenders to consider a portion of estimated ADU rent for qualifying, and lender overlays may apply.
Do I need special insurance to rent an ADU in Kirkwood?
- Usually yes. Most insurers require a landlord or dwelling policy when you rent to unrelated tenants, and umbrella liability is worth exploring.
Are short-term rentals of an ADU legal in Kirkwood?
- They can be if you secure the required zoning approvals, occupancy permit, and a business license before listing.
