We considered going modular for our home, but wound up building it ourselves. On paper, a modular should be better, as they are built indoors on precision jigs. In the real world, quality varies, like on any type of construction. Here in SC, the price was about the same for a site-built home of the same finish level, so the main advantage was speed.

The main concern we had was in resale value. Many people still equate 'modular' with 'manufactured', which is completely wrong. Manufactured homes used to be called mobile homes, which used to be called trailers. They have a steel frame underneath. Modulars, on the other hand, are built to the same, or better standards as a site-built home. Somehow, people got the idea that they are similar to mobile homes. For an in-law home or guest house, they should be a great idea, especially as the site disruption should be a lot shorter.

Make sure that which ever way you go, you check out the contractor thoroughly. I have friends who just had a modular built, and, while the house itself is fine, the on-site work was terrible, and wound up adding several months to the build because they screwed up so many things.

It should go without saying, but make sure that a second home is OK with your local zoning and building departments before you invest too much time or money.