Thinking About Building a DADU in Seattle? Read This First.

Many investors hear the word DADU and picture easy money, build a small home in the backyard, rent it out, and watch the cash flow roll in.

Reality check: Seattle’s DADU rules can make or break your project. If you don’t understand the zoning, design and financing guidelines, you’ll lose time, burn money, and stall out.

Here’s what you need to know before building a Detached Accessory Dwelling Unit (DADU) in Seattle.

A DADU (Detached Accessory Dwelling Unit) is a small, independent living space built on the same lot as your main house - sometimes called a backyard cottage or carriage house.

For investors, DADUs can be a wealth multiplier because they:

  • Add rental income on a single-family lot

  • Boost overall property value

  • Create flexible options (Airbnb, long-term rental, or even condo conversion)

In a city with high housing demand and limited inventory like Seattle, a DADU can turn a good deal into a great one — if it’s built right.

There’s no longer a strict minimum lot size requirement for DADUs. However, the unit must still fit within setbacks, height, and lot coverage limits.

Most zones allow DADUs up to 16–18 feet tall, depending on roof type and lot width.

Typically, 5 feet from the side and rear property lines. Always verify your zoning map to confirm.

The maximum DADU size is generally 1,000 sq. ft. Smaller lots may impose tighter limits.

Parking Requirements (Updated 2025)

This one’s a game changer. Seattle no longer requires off-street parking for DADUs.
However, if your main house currently has required parking, you can’t remove it unless you replace it with a code-compliant spot elsewhere on the property.

This shift reflects Seattle’s broader housing reform efforts, making it easier to build ADUs and DADUs while reducing parking mandates that previously slowed development.

Always confirm with Seattle’s Department of Construction & Inspections (SDCI) before designing.

Seattle expects DADUs to complement existing neighborhoods — not stand out awkwardly.

  • Design: Rooflines, materials, and windows should harmonize with the main house.

  • Entryways: Must be safe, clear, and easily accessible.

  • Utilities: Each DADU requires separate hookups for water, sewer, and electricity, which often means trenching and additional site work.

Budget $40K–$70K for utility connections alone. Many investors overlook this and blow their budget mid-project.

Getting financing for small-scale construction can be tricky. Traditional banks often hesitate on DADU loans, so flexibility is key:

  • HELOC: Use existing equity in your main property.

  • Cash-Out Refi: Pull capital for construction.

  • Private or Hard Money: Ideal for short-term builds followed by a refinance.

Line up financing early, don’t wait for permits to finalize.

Your DADU strategy determines your entire approach:

  • Long-Term Rental: Steady, predictable income and easier management.

  • Short-Term Rental (Airbnb): Higher potential returns but tighter city oversight. Always check Seattle’s short-term rental rules.

  • Condo Conversion: Seattle allows DADUs to be condoized and sold separately — a powerful wealth-building play for investors who plan ahead.

Your exit strategy should influence your design, financing, and build decisions from the start.

DADUs aren’t weekend projects.

  • Permitting: 6–12 months depending on design complexity.

  • Construction: Another 6–12 months, depending on contractor availability and season.

  • Cost Range: Expect $300–$400 per sq. ft. in total project costs — including design, permits, site prep, trenching, and finishes.

A detailed, realistic budget protects your returns.

Seattle DADUs are one of the most powerful tools in real estate investing today but they’re not simple. Between zoning, design, financing, and strategy, you need to play smart from day one.

Done right, a DADU can double your returns and transform your property’s potential. Done wrong, it can become a money pit.

Stephen Husted