A Beginner-Friendly Guide To ADU Housing- Is It A Good Option For You?

A Beginner-Friendly Guide To ADU Housing- Is It A Good Option For You?

Generally speaking, the ADU should be less than 16 feet tall. And if your ADU is below this 16 feet height and less than 750 square feet, its building permit ca

There has been a growing number of ADUs over the last few years, and they’ve become quite a popular housing option for many people. More and more communities in the states, particularly in California, are being allowed to construct ADUs with ease of housing regulations, which will likely grow the number of potential ADU owners.

If you’re interested in having your own ADU and renting it out for additional income, this article will tell you everything you need to know about ADUs, how beneficial they are, and whether they’re a right fit for you.

What is an ADU?

ADU stands for an accessory dwelling unit, which is a detached or semi-detached home located in close proximity to your main house. It's a separate dwelling, with its own bathroom and kitchen, that you can create by building a basement or a backyard studio.

Like any other property, an ADU can be rented or sold. Its ownership means having your own home with room to set down roots. But it also means having the opportunity to generate income by renting out your home.

ADU ownership is a choice that a growing number of households are making, particularly as housing costs rise and millennials struggle to afford homes.

Benefits of having an ADU

Now that you know what an ADU is, let’s talk about what it offers. There are many benefits of having an ADU both for the tenant and the property owner.

1. Passive Rental Income: Your garage-turned studio apartment or a guest house could earn you a passive rental income after your construction costs have been compensated. You could provide long-term accommodations for aging parents, or you could generate income from your second home.

2. Increased Affordability: Even in a down market, ADU development can make sense. Tax credits, mortgage financing, and low interest rates make building an ADU cheaper than ever. Plus, ADUs recoup their construction costs in just a few years, making them a solid investment.

3. Flexibility in Living: ADUs can be quite flexible in terms of renting and living where the property owner can rent it out and see who fits well. At the same time, the tenants can experience living in a small and separate unit with no long-term commitments and construction expenses.

4. Faster Return On Investment: At the time of ADU construction Oakland or when renovations are needed, some construction costs become essential to make the unit tenant-ready. But as the property owners start renting out the space, they get to see a quick return on investment.

How to find an ADU that fits best for you

If you’re interested in living in an ADU and are looking for a place to rent out, here’s how you can find one that works best for you:

Search online or ask your family/friends

Start by searching online about ADUs near you and contact people who have them and are also from the same location.

If that doesn’t work out, it’s possible that your friends or family may have an ADU attached to the property that they’re renting out. Ask them if they want to rent out the unit to you or get to know about someone else from them who wants to rent an ADU instead.

Visit the ADU and read the contract

When you find a unit, pay a visit and see what size it is. If you’re looking for a single room, a small studio apartment will work best. But if you want to move in with your friends or family, try looking for a 2 or 3 bedroom unit for a better experience.

After you agree on a place that fits well, read the contract thoroughly and discuss the terms with your landlord.