Are you looking for creative ways to bring in some extra income during the pandemic? You don’t have to look much further than your own Los Angeles backyard. ADU stands for an “accessory dwelling unit.” To give you a better idea about what we are talking about, they are most commonly referred to as granny flats and mother-in-law apartments.
These dwellings are either attached to or detached from the main home and exist on the same lot as your house. ADUs offer many benefits for homeowners who are looking for new ways to earn additional income in their own backyard.
Benefits Of ADU
When you have an ADU, you are producing secondary rental income for your family. You are also effectively increasing the occupancy of a plot of land, creating more of communal living space while maintaining privacy for both homes. In addition, you are offering a living space that can be rented to a family.
ADUs are real homes. That’s why if you are looking into one as another source of income, you still need to have the proper building permits, and it will require a bit of an investment to come to fruition.
Boost Property Value
In addition to bringing in income for your household, an ADU can help boost the overall value of your home. While it can be hard to pinpoint exactly how much value an ADU can add to a home, many have reported seeing as much as 34% added value to the property alongside an average of a 51% increase in the home’s resale value.
Long–Term Return On Investment (ROI)
To get the best ROI for your ADU and pull in a good secondary income, rent the space out to a tenant. This will provide your family with monthly income for as long as the unit is being rented out. However, before doing this, make sure to screen each potential tenant thoroughly.
You can also choose to accept short-term occupants only. California allows this as long as the ADU is in the primary residence of the owner. Short-term rentals are increasing in popularity and are even becoming vacation rental options for out-of-towners.
Ultimately, an ADU is a great and lucrative way to boost the value of your home and supply your family with some much-needed additional income during the hard times we are all currently facing. Just make sure that your ADU meets all of the legal requirements and that you choose trustworthy tenants.
Watch our 3rd Aspire Talks session with ADU expert Gabbi Sun to learn more about ADUs and how you can create an income stream.