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Screening a strong tenant only solves part of what makes a rental profitable, a lesson we cover in our piece on building trust before the lease begins. The other part often comes down to how well an owner uses the property itself, and for many Murray lots, that means looking past the main house at whatever space has been sitting idle in the backyard.
A detached garage, a wide side yard, or an old storage structure holds more earning potential than most owners assume. Turning that space into a second, fully independent unit is usually far less expensive than buying another property, and it lets you grow rental income from a lot you already control instead of competing in a market where prices keep climbing.
Key Takeaways
- A second unit turns unused garage or yard space into new rental income without requiring more land.
- Utah's streamlined permitting has made ADU approvals faster and more predictable in recent years.
- Location within the Salt Lake Valley still shapes how much rent a second unit can realistically pull in.
- Financing, taxes, and ongoing upkeep all factor into the real return alongside construction costs.
Turning Unused Space Into a Working Rental
Most Murray lots hold space that produces nothing. A detached garage, a wide side yard, or an underused corner of the backyard sits idle year after year while the main house produces the only rent check. Converting that space into a second unit changes what the whole property can generate.
The new unit needs its own entrance, kitchen, and bathroom to work as an actual rental rather than an extra bedroom. That separation lets a tenant lease it independently, and it's the detail that distinguishes an ADU from a simple room addition in the eyes of both renters and appraisers. Owners weighing whether their current layout supports a conversion often start by reviewing our look at renovation payoff, since not every upgrade holds its value once tenants move in.
Permitting has kept pace with demand across much of Utah. Many ADU applications now qualify for a faster, standards-based review instead of a lengthy discretionary hearing, which shortens the distance between planning and collecting rent.
What a Real Murray Conversion Looked Like
One of the owners we work with near Murray came to us with a detached garage that hadn't held a vehicle in years, mostly holiday decorations, an old workbench, and boxes he kept meaning to sort. His property brought in a single lease each month, and he wanted a clear answer on whether converting that space into something rentable was worth the cost.
We compared his situation against similar conversions nearby, ran the construction numbers against expected rent, and helped him plan a one-bedroom unit with its own entrance and a compact kitchen.
Once it was finished and leased, he had two rent checks coming in instead of one, and a later appraisal reflected the added unit as a meaningful contributor to the property's higher value. The lot itself never changed size. How he used it did, and that's the part most Murray owners can picture happening on their own property.
Where in the Salt Lake Valley You Build Still Matters
Not every neighborhood offers the same rental demand, so location still shapes the payoff even within the valley. A unit near major employers, transit lines, or well-established residential pockets tends to lease faster than one further from those amenities.
Research from the Mercatus Center found that close to one in five residential units produced in California today is an ADU, a pace that has pushed other fast-growing metros, including several along the Wasatch Front, toward similarly streamlined approval processes. A narrow lot might only support a garage conversion, while a larger one could fit a detached unit with more privacy and a stronger rent ceiling.
Numbers Before Nail Guns
Building a second unit is a real financial commitment, and owners deserve a clear answer about whether it pays off before construction starts.
What Gets Reviewed First
Before we recommend an ADU, we look at construction costs, expected rent, financing terms, and payback timeline using comparable Murray properties. Owners who've smoothed out their rent collection through our look at payment pattern shifts usually have a clearer read on their existing cash flow, which makes projecting the new unit's return more accurate.
Fitting It Into a Bigger Plan
An ADU is a capital improvement, not a line item in next quarter's budget. It belongs in your broader property plan so it doesn't compete for funds against a roof repair or another necessary upgrade down the road. The Federal Housing Finance Agency tracked a median appraised value near $1,064,000 in 2023 for California properties with an ADU, compared to $715,000 for properties without one, a gap that shows how much value a well-placed second unit can add once it's finished and rented.
Money Details Owners Often Miss
Three things tend to surprise owners once the project is underway.
- Financing usually relies on home equity, a construction loan, or a cash-out refinance, and each carries different repayment terms.
- Rental income from the new unit is taxable, and depreciation, insurance, and maintenance need to be tracked separately from the main house.
- Utilities, landscaping, and repairs for the second structure add ongoing costs that belong in your rent calculation from day one.
Owners who want a professional read on these numbers before committing can review our residential management services to see how the added unit fits alongside the rest of the property.
A Second Unit Brings a Second Set of Duties
Adding a unit means adding a second lease, a second tenant relationship, and a second round of upkeep.
- A separate lease and screening process, since background checks don't get lighter because the unit is smaller.
- Distinct bookkeeping for income and expenses tied to the new unit.
- A second set of maintenance calls, since repairs now apply to two structures instead of one.
Getting realistic rent expectations before finalizing a design matters here, and a complimentary rental valuation based on comparable Murray properties can help set that baseline early. Owners weighing how a second unit affects overall leasing performance also benefit from reviewing our notes on listing quality, since a well-built ADU still needs a listing that attracts the right applicants.
FAQs about ADUs as a Rental Income Strategy in Murray, UT
Does Utah's cold winter climate affect how an ADU should be built?
Yes, insulation, heating efficiency, and roof design matter more here than in milder climates. Investing in a properly sized furnace and good insulation upfront usually saves money on winter utility costs.
Can I convert a detached shop building into an ADU instead of a garage?
Often, yes, as long as the structure meets local building code for livable space and utility access. A structural inspection early in the process confirms whether conversion makes sense.
How does adding an ADU affect snow removal responsibilities on my property?
You'll likely need a clear plan for the ADU's own walkway and parking area, separate from the main house. Some owners include this in the lease terms to avoid confusion each winter.
Will a second unit change how my property is assessed for county taxes?
Most counties reassess once the structure is finished and permitted, reflecting the added square footage. Factoring that increase into your rent projections avoids an unexpected budget gap later.
What's a realistic timeline from permit approval to a tenant moving in?
Most Murray conversions take four to six months once permits clear, depending on scope. Detached new builds typically run longer than garage conversions because of foundation and utility work.
Two Leases, One Property
We've watched Murray owners realize, sometimes years into ownership, that the garage they've been storing bikes in could have been generating rent the entire time. Once a second unit is built and leased, most owners tell us they wish they'd started the process sooner rather than treating it as a someday project. PMI Wasatch Front works alongside owners through each stage, from a first conversation about feasibility to the day a new tenant moves in.
Ready to find out what your property could support? Get a personalized ROI estimate and use it to guide your next move.
