SB9 Lot Splits vs. Building an ADU: Which One Is Better for You?

Gloria Riechers

Jun 10, 2025

Ease of Selling:
- Building an ADU creates one expensive property (1 parcel + 2 homes), limiting your buyer pool.
- Lot splitting gives you two separate, more affordable properties, making it easier to sell each one.
Creating More Value:
- Two legal real estate assets (two parcels) are worth more than a single property with an ADU.
- A lot split builds lasting value and gives you a strong secondary asset for future financial security.
More Options:
- With two parcels, you can sell one, keep both, rent one out, or gift them separately to heirs.
- Greater flexibility for long-term planning and wealth building.
Access to Cash:
- After a lot split, you can take out a mortgage on the new parcel for cash.
- If you only build an ADU, you can’t get a separate mortgage for it — only a line of credit or second mortgage, which usually have higher rates.