Once a backyard cottage is on the table, one question comes up quickly. How much could it rent for? A careful estimate of DADU rental income starts with local evidence, not a single online number. It also separates what tenants pay from what you actually keep.

This guide explains how to build a preliminary rent scenario for a Seattle cottage. It covers comparable rentals, unit size, location, amenities, vacancy and seasonality. It does not offer rent figures, since those change with the market and differ from one block to the next.

Begin With Comparable Legal Rentals

The best starting point is a set of comparable units near your property. Look for legal rentals with a similar size, bedroom count and type of building. A detached cottage with a yard often competes with other small homes rather than with large apartment buildings.

Gather several examples, not just one. Then note what each listing includes, such as parking, laundry, utilities or outdoor space. Those details explain much of the difference between asking rents.

Also, a unit that rented quickly tells you more than one that sat empty for weeks. If possible, ask local landlords or property managers what similar units actually leased for. Their answers often differ from what appears in online listings.

How Size and Layout Affect DADU Rental Income

Size matters, but layout often matters more. A well planned one bedroom cottage may rent better than a larger studio with awkward space. Similarly, a second bedroom can widen your pool of renters to roommates or small families. Our guide to DADU bedroom count explains how that choice shapes a plan.

The city also sets limits on how big a cottage can be. So the size you can build may cap the size you can rent. Our post on Seattle ADU size covers those limits in more detail.

Location and Neighborhood Factors

Location shapes rent in ways a floor plan cannot. Renters often weigh transit, walkability, schools, parks and the commute to major job centers. As a result, two similar cottages a few miles apart can rent for very different amounts.

Small site details count too. A quiet street, a private entry and a pleasant view of the garden can make a unit stand out. By contrast, a cottage tucked tight against an alley may draw fewer applicants. Because these factors are hard to price, compare your lot with your comparables one feature at a time.

Amenities That Support DADU Rental Income

Certain features tend to attract renters and support steadier demand. In-unit laundry, a dishwasher and good storage are common examples. Likewise, a private outdoor area, bike storage or an electric vehicle charger can help a listing stand out.

Parking deserves its own look. Seattle does not require off street parking for ADUs, yet some renters still want a spot. Our post on Seattle ADU parking explains those rules. Then you can decide whether a parking space is worth the yard it uses.

Vacancy and Seasonality

Rental demand rises and falls through the year. In many markets, more people move in summer than in winter. Therefore, a lease that ends in the middle of winter may take longer to fill. Some owners set lease terms so that renewals land during busier months.

A realistic estimate also assumes some empty weeks between tenants. During that time, you still pay for insurance, taxes and utilities. So build a vacancy allowance into every scenario instead of assuming a full year of rent. Even a short gap can change the yearly total more than many owners expect.

Gross Rent Versus Net Operating Income

Gross rent is the total tenants pay over a year. Net operating income is what remains after operating costs such as repairs, insurance, taxes, management and utilities you cover. That second number is the one that shows whether the cottage pays its own way. In addition, many owners set aside a reserve for big future repairs, such as a roof or a water heater.

Loan payments come after that. If you financed the build, subtract the payment to see your cash flow. Our post on DADU separate meters explains how metering affects which utility costs land on the owner.

Building Conservative DADU Rental Income Scenarios

Instead of a single forecast, create a low, middle and high scenario. Base the low case on the weakest comparable you found and a longer vacancy. Then base the middle case on typical comparables, and keep the high case modest. If the project only works in the high case, rethink the plan before you build.

Treat automated tools with care as well. Seattle’s Council Bill 121000, effective July 31, 2025, bars software that sets or recommends rents using data from other landlords’ properties. The city’s Renting in Seattle site explains that rule and other landlord requirements. Checking it before you set a price is a sensible step.

Bringing the Estimate Together

A good estimate of DADU rental income is a range, not a promise. It rests on legal comparables, honest assumptions about vacancy and a clear view of expenses. It also changes as the market moves, so it is worth updating before you sign a lease.

Finally, consider sharing your scenarios with a lender, a tax adviser or a local property manager. Each can point out costs or risks you may have missed. With that feedback, you can set expectations that match your property and your goals.