Gross yield
Annual rent ÷ build cost
The fastest sanity check. A Boise ADU that runs $1,500/mo on a $200k build is at a 9% gross yield. Anything under 6% is hard to make work; 8–12% is the realistic Boise band for pre-approved plans.
ROI · Investor Math
What's the ROI on a Boise ADU?
Plug in a pre-approved plan, finish tier, rent, and financing — see gross yield, monthly cash flow, payback, and 10-year cash-on-cash return. Built on real 2026 Boise rent and lender data.
What the four numbers mean
ROI on a backyard cottage isn't a single number — it's a few different ways to measure the same project. Each metric below answers a different question and is useful in a different conversation.
Monthly cash flow after debt
(Net operating income − annual debt service) ÷ 12
What lands in your account each month after the mortgage payment and the operating reserve. The number that matters if you're house-hacking or counting on the ADU to cover its own carry.
Payback period
Build cost ÷ annual net operating income
Years to recover the build cost on operating cash flow alone — no appreciation, no tax shield. A useful conservative anchor. Boise pre-approved plans typically pencil at 12–18 years on this basis.
10-year cash-on-cash
10-yr cumulative after-debt cash flow ÷ cash invested
Total cash returned over a decade as a percent of the cash you actually put in. With 3% rent growth modeled, a Standard-finish Kingfisher on a HELOC commonly clears 60–100% over 10 years before counting appreciation.
What we assumed (every default, on one page)
No hidden inputs. Every default the calculator uses is listed below with the source it came from. Change the rent, finish, rate, or financing path in the tool above and your numbers shift; these defaults stay published so the math is auditable.
| Assumption | Default | Source / rationale |
|---|---|---|
| Vacancy rate | 5% | Standard pro-forma assumption for stabilized long-term Boise rentals. Conservative against Boise's sub-3% multifamily vacancy reported in Q1 2026. |
| Operating expense ratio | 25% of gross rent | Covers property tax, insurance, maintenance reserve, and basic management. ADUs run lighter than full SFRs because of shared utilities, smaller footprint, and a single mechanical system. |
| Annual rent growth | 3% | Reconciled across Apartment List (+3.4% YoY, May 2026) and RentCafe / Yardi Matrix (+2.6% YoY, April 2026) for Boise. |
| HELOC rate default | 6.25% | Idaho Central Credit Union published HELOC rate, May 2026. MACU sits at 7.25%+; ICCU is the lowest publicly listed Idaho rate at capture. |
| Construction loan rate default | 6.75% | Mountain America Credit Union published construction-loan rate, May 2026 (7.088% APR). |
| Build cost per sqft | $340 / $405 / $480 (Essential / Standard / Premium) | Same per-sqft figures used in /cost-calculator. Reconciled against Iron Crest's published $180k–$280k 1BR range and current Boise builder bids. |
| Cost range factor | ±10% low / +12% high vs mid-point | Matches /cost-calculator's lot-condition adjustment. Mid-point feeds the ROI math; range bounds shown for transparency. |
| Loan amortization | 30-year fully amortizing for construction loan; interest-only for HELOC | Most Idaho HELOCs offer interest-only payments during the draw period (MACU, ICCU). Construction-to-perm typically lands at 30-year amortization. |
What this calculator doesn't model
A four-input tool can't capture everything that moves real returns. The four items below either help your number (tax, ADU appreciation, refinance timing) or hurt it (vacancy spikes, unit-down years). Build your own scenario range; don't take a single point estimate as the answer.
- Tax treatment — depreciation, mortgage interest deduction, and pass-through losses can materially boost after-tax return. Talk to a CPA.
- Property appreciation on the ADU itself — modeled returns are operating-only. Boise's median home value appreciation has compounded ~5–7% over the last decade.
- Refinance timing — locking in a lower fixed rate after a construction-loan draw can shift the cash flow picture meaningfully.
- Vacancy spikes, repair years, and turnover — a single full-unit-down quarter can erase a year of modeled cash flow.
Boise ADU ROI — frequently asked
How accurate is this ROI estimate?
It's a planning model, not an underwriting document. The build cost math comes straight from our cost calculator (the same numbers we quote against), and the operating assumptions — 5% vacancy, 25% expense ratio, 3% rent growth — are standard pro-forma figures for stabilized Boise rentals. The biggest variances in real life come from finish choices we couldn't anticipate, lender pricing on the day you close, and tax position. Treat the output as a defensible starting point, not a final number.
Where does the rent default come from?
Boise 1BR median rent was $1,479 (Apartment List, May 2026) and $1,503 (RentCafe / Yardi Matrix, April 2026) when these defaults were set. We use $1,500 for a 1BR Kingfisher, $1,200 for a studio (ADUs typically discount ~10% vs comparable apartments because of smaller footprint), and $1,800 for a 2BR Kestrel. Adjust for your neighborhood — Southeast Boise (83706) runs higher; the Central Bench runs lower.
What expense ratio is realistic for a Boise ADU?
We default to 25% of gross rent, which covers Ada County property tax, dwelling insurance, a maintenance reserve, and light self-management. If you hire third-party management at 8–10%, the ratio climbs to ~33%. If you're managing it yourself and have a brand-new build with no major systems aging, you can run leaner in years 1–5 — but reserving 25% keeps the model honest against year-7 water heater and year-15 roof.
Should I use Essential, Standard, or Premium finish for the best ROI?
Standard wins for long-term-rental ROI nearly every time. The rent premium on Premium finish (tile baths, hardwoods, designer cabinets) doesn't fully recover the $75/sqft cost delta in Boise's long-term market — tenants pay for square footage and bedroom count more than finish tier. Premium pays back faster in short-term rental and house-hack scenarios where you're occupying the unit yourself.
How do I finance this without selling stocks?
Three common paths in Idaho: (1) HELOC on existing home equity — ICCU is at 6.25% and Mountain America at 7.25%+, both with interest-only draw periods. Lowest cost, variable rate. (2) Construction-to-permanent loan — MACU publishes 6.75%, locks the rate before construction starts, typically 20% down. (3) Cash-out refi — rolls the ADU into your primary mortgage at the prevailing 30-yr rate (~6.7–6.9% in Boise as of May 2026). Each shifts the cash-on-cash math; toggle the financing path in the calculator to see.
Keep digging
The cost, financing, and rent figures behind this calculator — with the context that didn't fit in the tool.
Free Lot Check · 24-Hour Response
Want the math run on your lot?
Send us your address and the plan you're modeling. We'll come back with what fits, what it would cost on your specific site, and a real ROI projection — not a generic calculator output.