In some cases, the income from the rental of their former home can also offset the new ADUs expenses.
And if financing a new ADU is an issue, they might build the unit and rent it out years before needing it themselves to recoup its construction costs. So, the transition doesn’t need to occur immediately. In that scenario, the owner would continue to live in their current primary residence as long as desired and possible (with or without Aging In Place modifications) and have already built the ADU with the intention of occupying it in the future. If timed right, the cost of the ADU could potentially be completely offset before living in it.
It’s an innovative way of Retiring In Place.
The primary residence doesn’t necessarily need to become a rental. The same situation also works if you move your family into the primary home. Children, grandchildren, or extended family can live in the residence and offset costs. In many cases, those family members that would theoretically be in-inheriting the primary property eventually in any case. They are just taking responsibility for maintaining the homes now rather than years later.
Sort of a reverse version of building an ADU on your property for In-Laws to occupy, except, in this case, you would be building it for yourself.