ADU Strategies with Will Brooks

Will Brooks is a fellow short-term rental investor and owner-operator across North Carolina and surrounding areas. What he loves about the ADU strategy is how wonderfully simple it really is. You’re not reinventing the wheel — you’re learning to spot properties that naturally lend themselves to having an accessory dwelling unit added, whether they’re rentals or not. And when you find the right one? Game changer.

What is an ADU?

An ADU — accessory dwelling unit — is essentially a small home. Sometimes it’s modern, sometimes traditional, sometimes it mirrors the main house. It doesn’t even have to be detached. Plenty of ADUs are tucked inside a home with their own private access.

Will shared one example where he walled off half of a basement, added a kitchen, HVAC, and electrical, and turned it into a one-bedroom studio. Many people create ADUs over garages or convert a garage entirely. Detached is most common, though — and often you wouldn’t even know the smaller home belongs to the same property unless someone tells you.

Having both the main house and an ADU opens up two powerful options:
• hosting small groups in the ADU, or
• hosting larger groups by offering both spaces together.

In slower seasons — or on weekdays when you’re not attracting big gatherings — ADUs shine. They function like a hotel alternative: full kitchen, better furnishings, unique decor, and usually a location closer to what guests actually want than a hotel wedged into a retail area. Will’s ADUs often hit 80–100% occupancy because of this.

He built his first one in 2022. He’s now on ADU number five.

---

Working Travelers vs. Vacationers

ADUs are incredibly appealing to working travelers — especially those who don’t want to eat out every night and value a kitchen, privacy, and comfort. But they perform just as well in urban leisure markets.

Will has found that while STRs generally aren’t in direct competition with hotels, ADUs absolutely can be. They compete particularly well during the business week because they offer hotel-level convenience with a more comfortable, home-like experience. Think stocked kitchens, 75″ TVs, designated workspaces, and full bathrooms — all the comforts business travelers compare against hotel options.

One of the biggest perks? These guests often roll right into the weekend booking window, giving you high occupancy and smooth transitions between guest avatars.

---

Pricing Strategy

Will uses PriceLabs to keep rates aligned with nearby hotel pricing. His weekends often match hotel rates, while weekdays are adjusted to realistic demand. Weekdays pay the bills. Weekends make the profit.

And ADU guests come back. He gets more repeat stays in these units than in his larger homes — mostly because they’re simple, easy, familiar, and consistently pleasant. Repeat guests often book directly, and he rewards that loyalty with discounted rates.

---

Short-Term vs Mid-Term Rentals

Mid-term rentals can work beautifully in markets with hospitals or universities, and Will manages one successful MTR in Chapel Hill. But overall, his short-term demand is strong enough that he rarely needs to pivot. In slower months, he may occasionally switch a property to mid-term, but the ADU model supports high occupancy year-round, especially with 7–14 day stays that reduce turnover and attract quality guests.

This creates a hybrid feel — weekday stays that keep the bills paid, weekend stays that bring in the premium revenue, and longer short-term stays sprinkled in to reduce churn.

---

Building an ADU on Your Residence vs a Rental Property

Building on your own primary residence is straightforward as long as you have the space. Most ADUs fall between 400–600 sq ft, though studios as small as 250–300 sq ft can work beautifully with smart layout and tall ceilings.

It is a construction project, though — trenching for sewer lines, separate electrical, water tie-ins, permitting, materials, and design choices. Will’s first build cost $100,000 (a number nearly impossible today), but because he already owned the land, every dollar went into the structure itself.

Building on an existing STR property is different. You now have operations to protect. Construction impacts guest experience, calendars, and revenue. You have to weigh whether to pause bookings, build off to the side, or plan around existing stays. It’s doable, but takes strategic timing.

Cities differ wildly on regulations — but today, more municipalities allow ADUs by right than ever before. Just a few years ago, the concept was often unfamiliar, and neighbors didn’t love it. Today, ADUs are seen as a solution to housing affordability and density concerns.

---

Zoning Considerations

When you’re evaluating a property for an ADU, a few zoning elements matter most:

• Setbacks — how close you can build to the side and rear property lines
• Height restrictions — duplex-style ADUs may not be allowed everywhere
• Impervious surface limits — how much hardscape (concrete, gravel, structures) the lot allows
• Utility placement — how far the ADU will sit from sewer or water lines

Impervious surface rules can make or break a deal. Some cities offer creative workarounds like density bonuses for rain gardens, cisterns, or other best-management features.

Rural areas tend to be far more flexible, especially with well and septic. Many rural ADUs are essentially guest houses — which perform incredibly well in STR settings.

---

Upselling Larger Spaces

Guests often book the smaller ADU, then learn the main house is available too. Will keeps this simple: mention it clearly in the listing and again in the pre-arrival messaging.

Most guests don’t read listings, so that extra touch of communication matters.

With one ADU and one main house, you actually create three listings:

1. ADU alone
2. Main house alone
3. Both together (parent-child listing)

This setup allows you to dynamically adjust pricing so weekday demand stays high, and weekend pricing pushes guests toward booking the full property when you want to avoid mismatched guest avatars on shared lots.

---

The Beauty of a Duplex ADU

Duplex ADUs create even more flexibility. Guests can book the top unit, the bottom unit, or both. If the property layout hides the ADU-orientation from the street, most guests don’t even realize it isn’t its own standalone address.

For operations, it’s a dream — shared cleaners, easy transitions, smoother turnovers, and guests who may shift between units depending on group size.

This model is also wonderfully scalable. Once you understand what to look for — property layout, zoning allowances, density bonuses — it becomes a repeatable strategy.

---

Unique Features: Will’s “Unicorn” Property

One of Will’s properties sits in a neighborhood mixed-use zone, which unlocked higher density, a duplex ADU closer to the house than normally allowed, and multiple rentable spaces on one lot. The fenced yard — a huge deal for pet-friendly stays — keeps occupancy consistently high.

With clever design, like a hidden interior door behind a TV allowing two exterior entrances, the ADU functions like a duplex even if it can’t officially be labeled one. These zoning and density nuances turned the property into a rare (and incredibly profitable) STR setup.

---

ROI: What You Can Expect

Will’s first $100,000 ADU brought in:

• Year 1: ~$30–33k gross
• Year 2: ~$40k
• Year 3 (forecast): ~$42–43k

Payback period? Just over three years if all net revenue went toward payoff.

Cash-on-cash? 30–35%.
And that’s without including revenue from the main house.

His newest ADU — a duplex — will cost around $300,000 due to inflation and increased scope. Even with the higher investment, revenue projections still justify the build, especially with the increased value and three rentable spaces.

Financing options vary: HELOCs, business credit lines, and sometimes DSCR loans depending on lender and use case. HELOCs are by far the most common.

Compared to a traditional single-family STR, ADUs often make the numbers pencil far more easily. Will won’t pursue a project unless he sees a 20–25% return, and many of his have yielded more.

Pet-friendly ADUs outperform non-pet-friendly options almost every time, reducing price sensitivity and attracting consistent, respectful guests.

---

Becoming the Best in Your Brand & Market

Will’s advice is beautifully simple: consistency.

Consistent design themes.
Consistent listing visuals.
Consistent guest experience touches.

Across Airbnb, VRBO, Booking.com — each listing should feel like part of the same family. Guests notice, especially when they book both the ADU and the main house together. It creates a sense of identity, familiarity, and trust.

He also includes small branded touches, like locally roasted coffee bags, in every property. Guests remember those details. They create a “signature” experience without needing a loud brand.

And above all: exceed expectations. Offer something delightful that you didn’t advertise. Guests anchor to that feeling — and that’s where your brand is born.

---

If anyone wants to reach out to Will for deeper ADU insights, he’s available at ShorttermRaleigh.com.