Top Home Builders Inc. is a professional guest house builder in San Jose. If you like to have your family and friends close by, then you may want to build a guest house. If you already have a property, one can be built where you find it suitable, usually in the corner of your backyard. Building guest houses look very similar to regular homes minus their smaller size.

For people who live away from family or friends, a guest house in the San Jose & Bay Area is the perfect accommodation solution. This way, they won’t have to travel further and you can see them more since they’re in your own backyard. 

cost of guest house

While a guest house is less extravagant than a hotel room, it can be much more personalized and cost-effective. In fact, you may have stumbled across a few of them as a lodging option when booking vacations or travel plans. While you may want to house family and friends, you can also turn the guest house into a rental property and make additional income.

As a guest house builder, our services are designed to meet your specific needs and budget, without compromising on quality. Continue reading for more information on guest houses – we will cover the cost of building a guest house and what the process is like.

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What is a Guest House?

While we briefly touched upon this already, it’s good to have a formal definition. A guest house is a building or dwelling that resides on the property of a local resident. People can only build guest houses if they own a home or land. Usually, guest houses are not long-term dwelling solutions, as they best suit short-term stays. Why?

Because while a guest house is personalized and cozy, it’s not as large or as functional as a regular home. If someone plans to stay somewhere long-term, then an actual house is needed. A nice thing to know is that you can build your guest house in the San Jose exactly how you’d like. You get to choose the size, layout, materials, colors, and more.

Different Types of Guest Houses in San Jose

There are many different types of guest houses in San Jose. And there is beauty in this as the different types can cater to people’s different lifestyles and living requirements. So, let’s get into the different types so you know how to plan for guest house construction. Choosing the right type of guest house that suits your family is crucial in San Jose. And once the building process begins, it’s hard to undo and change directions.

build guest house in backyard

New, Detached Builds

While this option may not be popular for cost-savings, it’s the perfect solution for increased privacy and freedom of space in San Jose. You choose an area on your property and that’s where a new guest house in san jose will be built. This option is also best for creative and design freedom, as you get to create it exactly the way you want.

There are no limitations. Or, if you don’t want to build a completely new structure, they can be fitted and combined with a garage structure that already exists. Of course, measurements will be taken to make sure it feels like a house once it’s built. So, how much does it cost of building a guest house in San Jose? While we will get into the specifics, take note that this type is the priciest.

cost to build a guest house in california

Converting a Garage

When converting a garage into a guest house, the structure stays as is — the changes made will be internal. This is the perfect option for people who don’t use their garages to park their cars. It’s also great if you just use it as storage. This might be the push you need to let go of old items and donate.

You can turn this space into something purposeful and meaningful, like having your children and their grandkids over for the weekend in San Jose! You can remodel your garage to suit your family’s needs. You may even want to spend time in it yourself once it looks brand new and cozy!

guest house builder san jose

Above Garage

If you are a person who does park their car in their garage, then this could be a great option for you. Take note that your garage should already have two levels, or it should have the space to build an additional level. If you plan to have many people in the dwelling, this may not be for you.

However, it is perfect if your child comes home from college and wants to stay in it because you converted their old bedroom into an office. Your garage doesn’t need to be detached to make this happen, it can be attached to your house too.

building a guest cottage

Bump Out

This title may sound funny, but the solution is logical. A bump out guest house is when you add a section to the current dwelling residence. So, the house that the local resident lives in can be built on and extended.

This is perfect for people who would like to utilize the guest space as a part of their house, keeping it as one cohesive dwelling. It still offers people privacy, but it can keep friends and family closer, without them having to go outside to enter a guest house in San Jose.

modular guest house san jose


If you are looking for convenience, then a modular guest house might be the solution for you. Have you heard of the term studio shed? It’s similar to that. Instead of the building process happening in your own yard, it’s produced in a factory. However, the finishing touches and the foundation will be worked on while it’s on your property.

Modular guest houses can save you time and money, and the company you choose does all the installation in San Jose. Essentially, the guest house comes pre-made and all they have to do is add it to your property. How simple is that? This guest house price usually sits at about $65,000.

Benefits of a Guest House in San Jose

The obvious benefit that we have touched upon is being able to host your family, friends, and loved ones. Wouldn’t it be nice for your guests to not have to leave your property at night after dinner? Wouldn’t it be reassuring to not have to wait for a text or phone call to make sure they have arrived safely at a hotel? It would be comforting to know that your guest doesn’t have to navigate or potentially get lost in an unfamiliar area around San Jose. They are close to you and safe in your san jose guest house, helping you rest easy at night.


Lower costs.

When guests use your guest house, they pay less than they would for a room at a hotel or resort. The guest house still has all of the amenities needed, and it may be even cozier and more personable.

Being familiar with the space.

By staying in a guest house, you are offering your guest familiarity and comfort. You’re offering them a stress-free experience.

The convenience.

When your guest has an on-residence dwelling to stay in, it is simple and convenient. They don’t need to worry about filling their car up with gas. They don’t need to worry about navigating the roads at night. They can stay put safely.

Additional space.

Let’s say you build a guest house and then realize you don’t need to use it as such. Well, no harm done, as you can relax and enjoy this newly renovated space! Use it for yourself! It also increases your property value too.

Additional income.

While you can make more money off of your property with a guest house, you can also make passive income by renting it out or leasing it as an Airbnb. People are always looking for Airbnbs and they are becoming a much more popular option than hotels. Wouldn’t it be nice to make an extra $500-$1,000 each weekend?

detached guest house san jose

Cost to Build a Guest House in San Jose

How much does it cost to build a guest house in the backyard in San Jose & Bay Area? First, there are a few variables it will depend on, like the size and materials used. The more square feet you want, the more money you are putting down. To put things into perspective, in California, prices range from $200 to $500 per square foot.

So, as an example, a guest house that is 1,200 square feet would cost $200 per square foot, equalling a total of $240,000. If you are worried about the price, always keep the square footage in mind and do the calculations until you find an amount that suits your budget.

Understand Neighbourhood Regulations

Being mindful and respectful of your neighbors is important too, and there are certain regulations you need to adhere to. For example, if your new guest house is pressed right next to their fence, you are not giving them the space and privacy they need. Your structure should not touch their fence or cross into their property. If you are unsure of the specifics of your neighborhood regulations, speak to someone who works at the city and ask for help. 

Here are some other bills to keep in mind when it comes to guest houses:

  • Senate Bill 1069: offers more flexibility with parking and hook-up fee requirements, meaning people can be approved for these buildings quicker.
  • Assembly Bill 2299: the original person of residence in the main home must give their approval and ensure that the building process meets city requirements.
  • Assembly Bill 2406: quickens the process of transforming a current bedroom into a liveable unit.
building guest house as home addition

Steps to Build a Guest House

Before the building process starts, you need to ask yourself some critical questions. These questions will ensure that you are going in the right direction with the right vision in mind because once you start building there is no going back.

Here’s how to make sure the building process will go smoothly.

Ask yourself:

  • Would I live in this dwelling myself?
  • Is the lighting situation suitable? 
  • Does the floor plan and layout make sense? Is it usable and functional?
  • Do I have all the needed paperwork completed and filled out properly?

That last question is especially important because if some of your paperwork isn’t filled out properly, it can delay the entire building process.

As for the process itself, here are the steps that will take place:

  • Step 1: get your finances in order and ensure you can afford to build a guest house
  • Step 2: Have a worker inspect your property and validate the project
  • Step 3: personalize your vision and design
  • Step 4: begin construction 
  • Step 5: Approval
Costs of permit for guest house

What Affects the Cost of Building a Guest House

So, we have touched on the basics of a guest house cost, but what actually makes the price fluctuate?

  • Costs of permit. The price will depend on where you live and if additional permits or fees are required. 
  • Plumbing and electric. Installing plumbing and electrical systems into your guest house isn’t cheap. The more complex the systems are and the more supplies are needed, the more expensive it will be. 
  • Size. When it comes to the guest house size, the more square footage, the more expensive it will be.

Building a Guest House FAQs

Building a guest house or in-law suite is a great asset for any home’s marketability. On average, people will pay between $100 and $200 per square foot. For example, a 700-square-foot guest house, about the size of a standard one-bedroom apartment in the United States, may cost as little as $60,000.

Yes, building a guest house adds value to your home because you’re increasing livable space and creating the opportunity for an income property.

The city of San Jose allows the building of guest houses on residential property if all proper permits are obtained and local bylaws are followed. Top Home Builders will help you apply for and obtain all said permits as the most trusted guest house builders in the Bay Area.

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Whether you’re interested in building a guest house, or guest cottage or looking for a guest house builder in San Jose call us today. With Top Home Builders, you’ll receive a free estimate of the cost to build a guest house. Call us today to build the guest house you’ve always wanted.