(BPT) - Are you considering or in the midst of planning to build an accessory dwelling unit (ADU)? If so, you're part of a fascinating trend that's meeting multiple housing needs across the United States.

ADUs are smaller, independent residences located on the same lot as or attached to an existing single-family home. These fully equipped units have their own kitchen, bathroom, sleeping area and entrance, making them perfect for aging parents, young adults and renters.

ADUs are growing in popularity. From 2018-2024, 2.8 million ADU permits were issued nationwide. California - where affordable housing has become harder and harder to find - leads the way, accounting for 32% of all ADU permits in the U.S. However, ADUs are quickly gaining traction in Florida and Texas, owing to rapid population growth and increasing housing demands.

Whether you're building an ADU to afford housing, take care of aging parents, help your children start their own lives or bring in extra income, there are several factors to consider before you start building. Read on to discover the five critical choices you need to make as you plan your ADU.

Choose an ADU type

When it comes to building an ADU, you need to decide whether the structure will be a detached, stand-alone residence or attached to your existing home.

If you have plenty of outdoor space, you may consider building a detached ADU, like a granny cottage or guest home. These detached units offer the most privacy and flexibility and are usually built in the back or side yard of a primary residence.

If you're tight on outdoor space, an attached ADU may be a better fit for your needs. Attached units are usually attached to your existing home or garage, which may be easier to construct, but generally offer less privacy than a detached ADU. The types of attached ADUs include:

• Garage conversion
• Above-garage constructions
• Interior conversions (a basement conversion, addition, or attic suite)

Ultimately, the ADU type you choose will depend on what best fits your property size, existing house structure and budget.

Don't overlook water heating

You don't often think about your water heater until it goes out, and you no longer have hot water to shower, wash your clothing or clean your dishes. However, with a new build like an ADU, you must consider what type of water-heating unit to install.

You could choose a conventional tank water heater. However, these traditional models take up a lot of space, something that you're already short on when building an ADU. You could install a water heater outdoors to save interior space, but you may not have enough space on your land to do so.

You don't have to give up space to have hot water in an ADU. Instead, consider installing a tankless water heater.

These small, efficient water heaters heat water on demand, meaning there's no need to store the water, saving you space. Some tankless water heaters, like those sold by Noritz, are about the size of a carry-on suitcase. You can easily wall-mount the heater, freeing valuable floor space indoors, which is perfect for a small ADU. In warmer climates, you can also hang these compact units on the exterior of the ADU, again saving space on the inside.

Another critical benefit of installing a tankless water heater in your ADU is the potential energy savings, helping to recover your investment. Because water is heated on demand, you won't have to worry about continuous water heating, which can help you save up to 40% on your utility bills over the life of the unit.

Think about installing solar panels

Another energy-efficient feature to consider when building your ADU is including solar panels in your construction plan.

This sustainable source of green power doesn't just reduce your carbon footprint. It also allows you to capture and use clean energy, reducing utility costs. According to SolarReviews, the average American household can save as much as $1,820 on electric bills a year, making ADU living even more affordable.

Installing solar panels can also reduce your reliance on the local power grid. When a power outage occurs or a blackout rolls through your neighborhood, your ADU won't go dark. It's a great first step toward energy independence, and it can help defray the costs of fluctuating electricity prices.

Don't skimp on insulation

Whether you live in a hot or cold climate, properly insulating your ADU can improve the structure's energy efficiency, while enhancing the residents' comfort, no matter the weather.

When a home is properly insulated, it helps keep the cold air inside during the summer and outside in the winter. Not only does this keep the space comfortable, but it can also lower your heating and cooling costs. According to the U.S. Department of Energy, on average, you can save up to 20% on your home's heating and cooling costs by properly insulating your home.

A few types of insulation to consider when planning your ADU include:

• Fiberglass batts: This is the most common type of insulation and an excellent DIY choice.
• Spray foam: This insulation expands to fill in spaces, reaching where fiberglass batts cannot.
• Hemp insulation: This eco-friendly insulation keeps your ADU comfy and can add to the unit's sustainability.

Consider outdoor features

Because ADUs tend to be smaller than other housing alternatives, space is at a premium. A simple way to maximize space is to create outdoor features to provide additional living and entertaining space for residents.

What you can accomplish outdoors will largely depend on the backyard space and the climate, but some typical outdoor features include:

• Rooftop decks
• Patios
• Backyard garden

Are you ready to start building?

Building your ideal ADU requires plenty of forethought. These five considerations are some of the most important choices to make before you break ground. They will help you ultimately create a space that you, your loved ones, or your renters will enjoy living in.