What Can An ADU Do For You?
An ADU, or "Accessory Dwelling Unit" is a hot trend happening both in new home builds that you see in your local neighborhood, and on HGTV. They're also residences that have been around for many decades, traditionally known as "mother-in law apartments" or "granny flats".
Builders are finding more and more creative ways to integrate these spaces into and apart from existing homes, to create a number of exciting possibilities for the homeowner. While we will explore various uses for ADU's, let's first look at some types of ADU's available:
Detached New Construction: this is exactly what it sounds like, a unit you build that is separate from the home (some even prefab with appliances, fixtures and finishes), but within the same property lines. In California for example, the State says that a single family residence can build a detached ADU as long as it is 10 feet from the main house, and 5 feet from all property lines. While that is a State-specific requirement, local governments often have variations on these restrictions, and you should always check with your specific city guidelines.
Garage Conversion: perhaps you currently are not parking your car in the garage because you have a long driveway or you prefer to park on the street. This is a great opportunity for the homeowner to earn additional income by converting this space into a rentable unit. This can work whether it’s attached or detached.
Above Garage Build: perhaps you do like to use your garage to park your car. In that case, another great opportunity is to build a unit above the garage for the same income-producing unit.
Interior: these can range from basement conversions and/or a space next to the basement, attached garages, or another area of the main house, such as the attic. Often called "Junior ADU's", these spaces share an adjoining wall of the primary house, and are part of the existing floorplan. Junior ADU's must have their own bathroom, entrance and kitchen.
Many homeowners love the idea of being a landlord in their own property. Compared to buying and renting out of State properties, this gives the homeowner more assurance by allowing them to keep an eye on their investment, oftentimes from their own living room. What are some other cool aspects of having an ADU?
ADU's can add equity to your home: part of the reason many newly built homes are incorporating ADU's as part of their plan is that builders have seen the market values increase in homes with these units. We realtors use the Multiple Listing Service (The MLS), which recently announced they are incorporating the ability to search for properties that already include an ADU. This shows that the California Association of Realtors sees the ongoing demand for these units, and wants to make sure they are identifiable to agents and their prospective buyers.
ADU's can help to offset mortgages:
First time buyers can find a great deal of value in these units, as rental income (either long or short term), can help offset the costs of one's mortgage payments. While long term rentals consist of six months or longer, a short term rental (STR) typically has stricter guidelines to participate. New STR restrictions went into effect this year in Los Angeles, and as mentioned earlier always check your local government's permissions before working your rental numbers.
ADU's can help with a housing shortage: though it may not be the first thing that comes to mind when adding this to your property. These units help fill a need for people in your area to find housing that otherwise may not be available in your neighborhood.
ADU's aren't just used as a residence:
Many people find great value in using their unit to run their business from. Whether you run a yoga studio, give dance lessons, record music, or create pieces of art, there are countless examples of professions that can benefit from an ADU.
While an Accessory Dwelling Unit may not for everyone, I hope I have provided some insights to the benefits they can bring. Before construction, make sure to always pull the proper permits and discuss with your local Building & Safety Department to ensure your plans meet their criteria. As mentioned earlier, local governments change their rules on short term rentals often and quickly, so always be sure to be ahead of the game with your investments!
If you're interested in learning more about ADU's, please reach out to me at anytime.