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What to Consider When Building an ADU

Whether you need a place for family to stay when they come to visit or want to generate some rental income without buying investment properties, you may consider building an accessory dwelling unit (ADU) in your backyard. Also called guesthouses, mother-in-law suites, and granny flats, ADUs allow you to expand your living space and help the community meet housing needs.

Building an ADU isn’t an overnight project. You’re building a new living space on your property, and it will likely be there for many years. Before you dive into the project, take some time to think through details like where you plan to build the unit and how it will function. The decisions you make for each of these considerations will help you design a unit you love.

Design

Most ADUs are detached units, and chances are that’s what you envision when you think of an ADU. However, finished basements, garage apartments, and additions to the house can be ADUs as long as they are completely self-sufficient with a functioning kitchen and bathroom. The average size of ADUs in California is 615 square feet, and these units typically have a one-bedroom or studio floor plan.

Cost

In Los Angeles County, the median cost to build an ADU is $100,000, and you can add $30,000 to that price in Orange and San Diego counties. Median rent for an ADU in Los Angeles County is $2,000 per month, and the median rent in Orange and San Diego counties is $2,150. Detached units tend to bring in more rent than other types of ADUs.

Planned Usage

In California, the majority of the homeowners who build ADUs do so to generate rental income, and 8% of them use the unit as a short-term rental property (less than one month). It’s helpful to have an idea of how you plan to use the unit because this can affect your design. For example, if the unit will be a guesthouse for your friends and family, you may want to build it closer to the main house than if you want to use the space for real estate investing.

Local Regulations

Under California’s Accessory Dwelling Unit Law, your homeowners’ association cannot prevent you from building an accessory dwelling unit in your backyard. This doesn’t mean you can go out and build anything you want. The law also specifies that the unit must be at least 50% smaller than the primary residence and cannot be larger than 1,200 square feet. It also limits you to one ADU per lot and requires you to live in the primary residence while you rent out the space.

Location on Property

When choosing where to build the ADU, consider the people who will be staying inside it. They need access to the sidewalk and street. This may require adding another gate to the fence or constructing a walking path for them to use. You also need to think about details like where you will keep the outdoor trash cans and where guests and tenants will park. Sharing a driveway may sound like a good idea, but getting up early to move cars around so someone can go to work quickly gets old.

Privacy

Having an ADU means having someone living in your backyard, even if it’s friends or family members in town for a visit. Keep this in mind as you figure out details like where to position the door and exactly how much your visitors will see inside your home through the windows. Think about how comfortable you feel with a shared outdoor living space and communal lifestyle. No matter where you decide to place the unit, be sure to install blinds or room darkening curtains for privacy.

Utilities

To qualify as an ADU, the unit needs electricity, water, and septic systems. You may be able to run electricity from your house to the unit, but a separate meter can come in handy if you plan to rent the space. If you’re on public sewer, find out what it takes to hook up the pipes to the main sewer line. If you have a septic tank, check with the authorities to make sure the septic tank you have can handle the extra demand.

Effortless Ownership is Within Your Reach

An ADU makes it possible to enter the long or short-term rental market without buying a separate property and is a great option if you’re ready to invest but are not yet ready for second homeownership. The OpenAiRE team can help you turn your real estate investing dreams into a reality. Find out how we can help you build your real estate portfolio and enjoy the freedom of effortless ownership.

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