Looking for steady rental income without buying a second property? In Dedham, a well planned accessory dwelling unit can turn unused space into monthly cash flow. You might be weighing permits, costs, parking, and whether short-term rentals are allowed. This guide gives you clear answers and a simple plan so you can move forward with confidence. Let’s dive in.
What Dedham now allows
Dedham updated its zoning in May 2025 to align with the Massachusetts ADU law. That means many single-family homeowners can add an ADU by right if they meet basic rules.
- Under state policy, one ADU per lot is a protected use in single-family zones. Units can be internal, attached, or detached, sized at the lesser of 900 square feet or half the main home’s floor area. See the state overview for details in the Massachusetts ADU guidance.
- Dedham’s bylaw implements the same size limits and sets local standards, including parking and rental rules. Review the local language in Dedham’s ADU bylaw (Article 15, 2025).
ADU size and type
- You may build one ADU per lot by right if it is no larger than half the primary dwelling’s gross floor area or 900 sq ft, whichever is smaller.
- ADUs can be created within the home, attached, or as a detached structure. Larger ADUs may be possible by special permit with added conditions.
Parking and transit exception
- Dedham requires one off-street parking space for an ADU.
- If your property is within 0.5 miles of a commuter rail, subway, ferry, or bus station, the bylaw provides a parking exemption. Confirm eligibility in Dedham’s ADU bylaw.
Short-term rental rules
- Short-term rental of ADUs created under the bylaw is prohibited. The town follows state definitions for short-term rentals. See the prohibition in Dedham’s ADU bylaw.
Permits and timeline in Dedham
You will work primarily with the Building Department. Plan your timeline around design, permits, inspections, and final sign-off before renting.
- Start with the Dedham Building Department to confirm what permits you need and how to submit through the town’s online portal.
- Typical permits include building, electrical, and plumbing/gas. The project must meet the Massachusetts Building Code and pass required inspections.
- If your home is on a septic system, Title 5 review can be triggered when adding bedrooms or increasing flow. Read MassDEP’s guidance for ADUs in the Title 5 resources.
- You will need a final Certificate of Occupancy or similar approval before leasing the unit.
Costs, financing, and ROI
Every property is different, but most budgets fall into a few common ranges.
- Typical build ranges in Massachusetts:
- Basement or garage conversions: roughly $50,000 to $175,000, depending on scope and finishes.
- Attached or detached new-build ADUs: often $150,000 to $350,000 or more based on size and specs.
- Expect add-ons like design fees, utility upgrades, septic work if applicable, site prep, landscaping, and permit costs.
- Some banks offer ADU-specific loans and may credit projected rent in underwriting. Explore options like this ADU loan program overview.
- Rents in Dedham track the broader Boston metro, where recent 0–2 bedroom asking rents have been near or under $3,000 in market reporting. For a data point, see this metro trend summary in the Realtor.com October Rental Report via Nasdaq. Your actual rent will depend on location, size, finishes, and parking.
Build your payback plan
- Identify your total project cost, including a 10 to 15 percent contingency.
- Estimate monthly rent using current local comparables and a property manager’s guidance.
- Subtract a conservative allowance for vacancy, maintenance, taxes, and insurance.
- Compare net annual income to your total cost to see payback years and cash-on-cash return.
Taxes, insurance, and legal basics
A new rental unit changes your property profile. Plan ahead so you stay compliant and covered.
- Property taxes: An ADU usually increases assessed value. For local rates and assessments, check the Dedham Assessor GIS, and ask the Assessors for an estimate of potential impact.
- Insurance: Standard homeowners policies often do not cover rental exposure. Ask your carrier about a landlord policy or endorsements. This primer explains common gaps in home and short-term rental coverage. Note that short-term rental is not allowed for ADUs under Dedham’s bylaw.
- Landlord obligations: Follow Massachusetts rules on leases, habitability, deposits, and disclosures. For pre-1978 housing, understand your duties under the Massachusetts lead law.
Step-by-step checklist
Use this as a roadmap from idea to first rent check.
- Confirm zoning fit
- Verify your lot is eligible under the ADU bylaw and note any overlays or dimensional limits. Review Dedham’s zoning resources.
- Check utilities and septic
- Confirm whether you are on sewer or septic. If septic, review Title 5 implications early using the Title 5 resources.
- Talk with the town
- Contact the Building Department to clarify permits, plan requirements, and inspections.
- Design and bids
- Hire an architect or designer. Get multiple contractor bids, including any utility or septic upgrades.
- Apply for permits
- Submit building, electrical, and plumbing permits. If you seek an ADU larger than by-right limits, discuss the special permit path.
- Build and inspect
- Complete work and pass inspections. Obtain your certificate of occupancy before marketing the unit.
- Prepare to rent
- Update insurance, set market rent, handle required disclosures, and finalize a compliant lease.
Location and zoning tips
- Parking exemption: If you are within 0.5 miles of qualifying transit, you may not need the extra parking space. Measure from your lot to the nearest station and verify in the bylaw.
- Overlays and setbacks: Historic districts, floodplains, and dimensional rules still apply. Start with Dedham’s zoning resources and confirm specifics with town staff.
- Site design: Keep access, privacy, and trash-storage in mind for tenant usability and neighbor relations.
Ready to explore an ADU for rental income in Dedham? If you want one accountable team to help you model the rent, coordinate design and permits, manage the build, place the tenant, and oversee the unit, talk with Smith & Oak Realty.
FAQs
Are ADUs legal to build and rent in Dedham?
- Yes. One ADU per lot is allowed by right in single-family zones if you meet size and local standards. Larger units may require a special permit.
Can I use my ADU as an Airbnb or short-term rental?
- No. Dedham’s ADU bylaw prohibits short-term rental of ADUs created under the bylaw.
Do I have to live on the property to rent my ADU?
- No owner-occupancy is required for a by-right ADU. Some special permits can include owner-occupancy conditions.
Do I need to add a parking space for my ADU?
- Usually yes, one off-street space. If you are within 0.5 miles of qualifying transit, the requirement may be waived.
What permits will I need before renting the ADU?
- Building, electrical, and plumbing permits, required inspections, and a final certificate of occupancy or similar approval.
Will my property taxes go up after I add an ADU?
- Likely. Adding finished living space typically increases assessed value. Ask the Dedham Assessors for an estimate of the impact.
