Case Study: Maine ADU 240 Rental Payback Example
A Place ADU 240 (240 sqft studio with full bath) runs $79,900 unit-only and $90,000 to $105,000 fully installed. As a long-term rental in Portland, payback runs about 7 to 8 years; as a self-managed short-term rental in Old Orchard Beach, payback runs about 5 years; as a property-managed STR, payback lands closer to 7 years. Even at the smaller footprint, the 240 pencils close to the larger ADU 400 because installed cost and rental income scale together. The choice between 240 and 400 is more about use case than ROI.
Last updated: 2026-05-02 | Author: Place Buildings Editorial Team | Reviewer: Place Buildings Project Review Team
ADU 240: three-scenario payback comparison
| Metric | Portland LTR | Old Orchard Beach STR (DIY) | Old Orchard Beach STR (managed) |
|---|---|---|---|
| Installed cost | ~$98,000 | ~$92,000 | ~$92,000 |
| Annual gross revenue | ~$16,800 | ~$28,000 | ~$28,000 |
| Annual operating costs | ~$3,800 | ~$10,000 | ~$15,600 |
| Net annual income | ~$13,000 | ~$18,000 | ~$12,400 |
| Simple payback | ~7.5 years | ~5.1 years | ~7.4 years |
| Cash-on-cash return | ~13% | ~20% | ~13% |
| Operator effort | Low (a few hrs/month) | 8 to 12 hrs/wk peak season | Low (a few hrs/month) |
ADU 240 vs. ADU 400: choosing the right footprint
| Dimension | ADU 240 | ADU 400 |
|---|---|---|
| Square footage | 240 sqft | 400 sqft |
| Layout | Studio with full bath | 1 bedroom with full bath |
| Unit price | $79,900 | $99,900 |
| Typical installed range | $90K to $105K | $110K to $135K |
| Best LTR fit | Solo professionals, students, downsizers | Couples, small families, longer tenancy |
| Best STR fit | Solo travelers, couples, weekend stays | Couples, small families, week-long stays |
| Best multi-gen fit | Adult child, single grandparent | Couple grandparents, full guest suite |
| Typical payback profile | Roughly comparable to ADU 400 | Roughly comparable to ADU 240 |
Why a 240 sqft ADU Still Pencils
The intuition that "smaller means worse return" does not hold for ADUs in the way it does for some other real estate. The ADU 240 has a lower installed cost than the ADU 400 - but it also has lower rental income. The two scale together, which means payback periods and cash-on-cash returns end up roughly comparable.
In practice, the choice between an ADU 240 and an ADU 400 is mostly about use case: who is going to live there, for how long, and at what life stage. The 240 fits solo occupants, weekend STR guests, single grandparents, and adult children comfortably. The 400 fits couples, small families, longer-term tenants, and full guest suites.
Installed Cost Anchor
Place pricing for the ADU 240 is $79,900 unit-only and $90,000 to $105,000 fully installed depending on lot conditions. Across the three operating scenarios in this case study, we use slightly different installed-cost anchors to reflect typical urban-vs-coastal site differences:
- Portland LTR scenario: $98,000 installed (urban infill, often slightly higher utility tie-in costs and tighter access).
- Old Orchard Beach STR scenarios: $92,000 installed (coastal residential lots often allow simpler site work).
- Both anchors fall within the $90,000 to $105,000 typical range; final pricing for any specific project depends on lot conditions, finish level, and town requirements.
Three Operating Scenarios
The first table above models the same building under three operating strategies. Read across to compare payback math, return profile, and operator effort.
- Portland LTR: studio rents for roughly $1,400 per month (anchored on HUD Cumberland County Fair Market Rent for an efficiency unit plus a new-construction premium). Net of vacancy, maintenance reserve, insurance bump, and property tax bump: ~$13,000 per year. Payback ~7.5 years, ~13% cash-on-cash, low effort.
- OOB STR-DIY: blended seasonal revenue around $28,000 per year (summer 13 weeks at ~80% occupancy and ~$250 ADR; shoulder and off-season weighted lower). Net after cleaning, platform fees, supplies, higher utility and wear, STR insurance rider: ~$18,000. Payback ~5 years, ~20% cash-on-cash, requires 8 to 12 hours per week during peak season.
- OOB STR-Managed: same revenue, plus 20% property manager fee. Net ~$12,400. Payback ~7.4 years, ~13% cash-on-cash, low effort. Lands roughly tied with Portland LTR.
How the 240 Compares to the 400
For the ADU 400, our Maine ADU ROI guide models the same three scenarios with similar payback profiles: about 7 years for Portland LTR, about 5 years for OOB STR-DIY, about 7 years for OOB STR-managed. The 240 produces nearly identical ratios.
The second table above maps the dimensions where the two models diverge. Square footage, layout, unit price, and installed range scale linearly. What changes is the use-case fit: a couple expects more than 240 sqft for a long stay, while a solo traveler is happy with the smaller footprint. Choose by who you expect to occupy the space, not by which one "performs better" on ROI - both perform similarly.
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The Non-Rental Case: Multi-Gen and In-Law Use
Not every ADU 240 is built for income. A meaningful share of Maine ADU projects are built for housing flexibility - an aging parent, an adult child returning home, a caregiver suite, a guest space that doubles as occasional rental.
For the multi-gen use case, the financial value shows up indirectly:
- Avoided cost of senior-care or assisted-living placement (often $5,000+ per month in Maine for a single-occupant facility).
- Avoided rent for adult children at market rates ($1,500 to $2,500+ per month in Greater Portland).
- Property value addition (a separate dwelling unit typically increases resale value, though specific impact varies by market).
- Optionality: the ADU can shift from family use to rental use as life circumstances change.
When 240 Makes Sense, When 400 Does
A practical decision rule for choosing between the two Place ADU models:
- Choose the ADU 240 if: occupant is a solo adult, lot is constrained, you want the lowest installed cost, you are targeting STR for solo travelers and couples, or you need flexibility between rental and family use.
- Choose the ADU 400 if: occupant is a couple or small family, occupant will stay long-term (LTR or multi-gen), STR strategy targets families or week-long stays, or your lot easily accommodates the larger footprint.
- If the lot can support either and the use case is ambiguous, the ADU 400 typically has a wider range of acceptable uses over time. The 240 is sharper but more constrained.
Validate For Your Property
For the broader rental-strategy comparison and the Maine STR regulatory landscape, see our Maine ADU ROI guide. For the cost layering behind the installed range, see our ADU cost guide. To explore which model fits your lot, try Configure 3D. When you want a town-specific feasibility, permit, and rental review for your address, Request a Free Property Feasibility Assessment.
Frequently Asked Questions
Does the smaller ADU 240 produce worse ROI than the larger ADU 400?
No, not meaningfully. The ADU 240 has a lower installed cost ($90K to $105K vs. $110K to $135K) but also lower rental income, and the two scale together. Payback periods and cash-on-cash returns end up roughly comparable across both models. The choice between them is mostly about use case - solo occupant vs. couple or family - rather than return.
Should I calculate payback from unit price alone?
No. Always use full installed cost ($90,000 to $105,000 for the ADU 240) including site prep, permitting, and utility connections. The unit price ($79,900) is the building only; site work and town permits add roughly $10,000 to $25,000 depending on lot conditions. Using unit price alone overstates ROI.
Is one rental estimate enough for planning?
No. Model multiple scenarios - conservative, base case, upside - to account for occupancy variability, seasonal demand, operating costs, and management overhead. The first table above shows three scenarios for the same building; your specific lot and market may push individual numbers up or down.
Can the ADU 240 work as STR even though it is just a studio?
Yes, often very well. Solo travelers and couples are the dominant STR demographic in many Maine markets, and 240 sqft is comfortable for shorter stays. The case-study math in the first table is built around that demographic. For longer stays or family travel, the ADU 400 is a better fit.
When does the multi-gen use case beat the rental use case?
When the household has a specific, near-term housing need - aging parent, adult child returning home, caregiver suite - the avoided cost of alternative housing usually exceeds rental income. Senior care in Maine commonly runs $5,000+ per month; market-rate rent for an adult child in Greater Portland runs $1,500 to $2,500+ per month. A single year of either case substantially offsets the installed cost.
Sources
We refresh legal and compliance references regularly to keep guidance current.
Related Maine Guides
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