Garage Conversion vs. DADU in Seattle: Cost, ROI, and Permit Speed Compared (2026)

In 2026, a turnkey garage conversion in the Puget Sound region runs roughly $85,000–$130,000 for a standard 1-car footprint (about 380–480 sq ft), with the typical project landing near $95,000. The walls, roof, and slab are already there — most of the budget goes to insulation, a bathroom, a kitchenette, HVAC, electrical upgrades, and finishes.

A new detached ADU (DADU) at 600–800 sq ft typically lands at $185,000 on the low end (pre-approved Tacoma or Everett plans on a flat lot) and $260,000–$420,000 in Seattle and Bellevue once you add foundation work, sewer extension, and design review. The cost-per-square-foot is similar — about $280–$420/sq ft for both — but the absolute check is roughly 2x larger for a DADU.

Garage conversions almost always permit faster. Seattle SDCI, Tacoma, and most King County jurisdictions treat them as alterations to an existing structure, which keeps you out of full land-use review when the footprint doesn't change. Real 2026 timelines we are seeing: 6–12 weeks from submittal to issued permit for a straightforward conversion, sometimes as quick as 4 weeks under Tacoma's pre-approved track.

A new DADU triggers the full ADU permit path — site plan, design review (in Seattle and Bellevue), stormwater, and often a SEPA checklist on larger lots. Expect 4–8 months from submittal to issued permit in Seattle, 3–5 months in Tacoma, and 5–9 months in Bellevue. If you need rental income fast, the garage conversion wins this round decisively.

A finished garage conversion in Seattle, Bellevue, or Kirkland rents for $1,500–$1,950/month in 2026; in Tacoma and Everett, $1,200–$1,550. A new 700 sq ft DADU rents for $2,100–$2,700/month in the Seattle metro and $1,700–$2,100 in the South Sound — the privacy of a standalone backyard cottage commands a real premium.

Run the math at typical 2026 numbers: a $95k garage conversion renting at $1,700/month nets roughly $16,700/year after operating costs — a simple 5.7-year payback. A $245k DADU renting at $2,400/month nets about $23,600/year — a 10.4-year payback. The garage conversion is the better cash-on-cash play; the DADU is the better long-term equity play (it adds 12–18% to your assessed value versus 5–8% for a conversion, and under HB 1337 it can eventually be subdivided and sold separately).

Pick a garage conversion when: your garage is already structurally sound, you want rental income inside of a year, your budget caps at $150k, or you are not planning to ever sell the unit separately. Pick a DADU when: your garage is undersized or in poor shape, you have lot area to spare, you want maximum rent and long-term resale value, or you are interested in the new unit-lot subdivision path that lets you sell the DADU on its own title.

On about 40% of the Puget Sound lots we evaluate, the right answer is actually both — convert the garage now for fast cash flow, and add a DADU in year 3 once the conversion is paying down the construction loan. HB 1337 allows two ADUs per lot in most cities, so stacking them is fully permitted.

Once you know which format fits the lot, the follow-on decision is who actually builds it — an ADU specialist, a general contractor, or you as your own GC. Each vendor type changes cost structure, permitting risk, and warranty in ways that don't show up on a bid sheet; we lay out the nine trade-offs in our ADU companies vs general contractors guide.

West Seattle garage conversion: 440 sq ft, $98,400 turnkey, permit issued in 7 weeks, rented in month 5 at $1,850/month — 5.2-year payback. Bellevue DADU: 720 sq ft, $268,000 turnkey, permit issued in 6 months, rented in month 11 at $2,650/month — 9.8-year payback but appraised value uplift of $215,000 at completion.

Every site is different — slope, soil, sewer location, and zoning overlay can swing both budgets by 20% or more. Our team has built 93+ ADUs across King, Pierce, and Snohomish counties and can run both scenarios side by side for your address in a single free site visit.