ADUs are becoming more and more popular for real estate investors and other people who want to rent for additional income. ADUs are backyard living units that can be attached to a principal residence, and they’re often attached by a separate, second-level structure like a second-story deck or walkway.
ADUs can appeal to homeowners because, in many cases, they increase the value of the principal residence. For a real estate investor, ADUs are often a way to add rental income to property that isn’t adequately utilized.
If you’ve been looking for an economically feasible way to add space to your property, consider converting your garage into an ADU. Keep reading to know more about what to consider when converting a garage into an ADU.
Plan the right size for an ADU and find an architect
When planning to turn your garage into an accessory dwelling unit, a two-parking space garage would ideally be the best to turn into a studio or a single-room apartment. The size can range from 350-800 feet square, depending on the number of rooms you want to build.
Next, finding an affordable architect for your project would be a good investment. You may also team up with a structural engineer to assess the structure, add a front food and windows, and modify other elements if needed. The cost of your garage conversion may be around $5000-$15000 at the low end, and the whole project can take 3-6 months to complete.
Build a detached ADU if you don’t have a garage
In case your property doesn’t include a garage, you can choose to build a detached ADU in your backyard, which has adequate space and a setback of at least 4 feet from the primary property. It can be either attached to your home or set back at 10 feet from it.
Depending on the size of ADU and the construction costs, a detached ADU can either be a studio apartment or a 2-3 bedroom house. The price is also determined by the number of stories and location, ranging from $300-$400 per square foot and $100,000 to $400,000 for the whole ADU construction.
Are ADUs subject to rent control?
No. ADUs are not subject to rent control, but that doesn’t mean rents are unregulated. California has rent control laws that apply to single-family homes, but since ADUs are not single-family homes, if a city passes an ordinance to apply ADU rent control to ADU units, ADUs will be subject to rent control.
However, most cities don’t apply rent control laws. The San Francisco Apartment Association surveyed its members and found that only 4.3 per cent had ordinances that apply rent control to ADUs. Even if a city does have such a law, it won’t apply to the owner’s primary residence, which makes sense because an ADU owner living in the main house wouldn’t benefit from rent control.
Is building an ADU legal?
It’s a common misconception that renting out a spare bedroom to a friend or relative is a legal gray area. While technically it may be, if your agreement is in writing, it is a legal contract.
This is true even if you only offer to share utilities and the guest doesn’t use the kitchen or bathroom.
There are cities that recognize “co-living” arrangements between neighbours, with rules about who can rent out rooms, but that’s the exception, not the rule.
In many jurisdictions, creating an accessory dwelling unit is legal. However, some cities have strict rules about zoning, permitting, and insurance requirements.
For instance, in Los Angeles, the city requires permits for ADUs. The ADU must be in the same unit as the primary home, and it must be under the same roof. The homeowner must also pay an additional monthly fee (currently $35).
According to city regulations, a second home is not a legal ADU, but converting a garage into an ADU is legal. For homeowners looking for additional income, ADUs can be the perfect solution.
However, before investing in an ADUs, it’s important to understand what, exactly, an ADU is. It’s is a separate structure, usually detached, attached to the main house, or built on the same lot as the house.