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Building an external ADU and renting it out

Seven Home Improvement

An extra residence on a single-family residential lot is known as an auxiliary dwelling unit, or simply an ADU.

An auxiliary dwelling unit is a second housing unit built on a property where there is already one residence. As the name suggests, an ADU is 500–1,000 SF (square feet) or less than the main residence.

ADUs are detached homes with all the spaces and conveniences a person needs to live comfortably, including a kitchen, bathroom, living and sleeping areas, and a completely private entrance from the main house. ADUs come in all shapes and sizes.

These houses may be brand-new residences or garages that have been converted into living spaces. Other ADUs are attached structures that resemble little apartments built onto the back of houses and share a wall with the main house.

Do you need the help of a professional to build an ADU?

To prevent making costly mistakes when constructing an ADU, it is a good idea to consult the experts from Seven Home Improvement.

ADU housing is subject to fewer regulations than regular single-family homes, yet these complex buildings still need to be constructed properly.

It is crucial to adhere to a tried-and-true approach in order to guarantee the proper building of your ADU.

Hiring specialists is a great way to prevent risks like wasting money on materials, having contractors make mistakes, and failing to obtain a building permit.

Here we have 4 things to think about when building an external ADU to rent out

1. What do I need to know before constructing an ADU for rental purposes?

Your home's worth (and taxes) will rise. With the installation of an ADU, not only will the value of your house increase significantly, but so will your taxes. The assessed value of your primary residence will not change, but the value of the auxiliary dwelling unit (ADU) will be added to the total. This is called a "blended assessment". Keep in mind, too, that revenue from the rental of the space might help to cover some or all of these costs.

2. How to get a higher rental price for my ADU

The layout and construction of your ADU should be optimized so that it may be rented out with ease. You should inform your builder that you want to rent out the ADU you are constructing so that they can provide you with the best advice and layout to bring in a higher rental.

By improving the layout, the ADU will be in high demand from prospective renters. In addition to years of expertise learning how to build to optimize the value you will receive out of the ADU, contractors will likely have a number of ready-to-build floor designs you may pick from but they will also be able to design a floor plan according to your unique needs if you have any.

3. What should I incorporate into my ADU to bring in a higher rental?

Incorporate elements that minimize the amount of room they take up. ADU’s that make the most of their square footage by providing amenities like open layouts, kitchen islands where renters can dine, generously sized bathrooms, and ample closet and storage space, tend to attract and retain tenants.

Choose high end finishes that will last for a long time. You can create an area that is highly functional but aesthetically pleasing all within your budget when you choose the right contractor.

4. What are people looking for when renting an ADU?

In addition to an attractive outdoor area and well-thought-out interior layout, many tenants will be searching for a few key conveniences in an ADU.

Separate entrances where possible - Think about how your potential renters will get inside the unit. Constructing a well-maintained route is preferable. It's also important to think about tenant parking, as well as how they'll get inside the property.

Comfort - If you rent out your property, your tenants would appreciate it if you provided amenities such as a full kitchen and private washing room. Including them in the design of your ADU will make a huge impact and allow you to set higher rentals to reflect the value of the conveniences you're providing.

It’s all in the beautiful details - Tenants are often ready to pay a premium for a rental that has upgraded cabinetry, worktops, and plumbing fixtures.

The great outdoors - A beautiful and comfortable outdoor area may be created around your ADU. Tenants are searching for a friendly and peaceful environment, and a patio, terrace, or yard access may help achieve that.

If it is pet friendly, a beautiful outdoor area will entice a wider variety of tenants to your ADU rental.

Privacy - The ADU might be separated from the main house for privacy by erecting a wall or hedging. In addition, you may choose to set up something like a separate storage area for your tenant. Anything that gives the person a sense of independence from the rest of the property is a great idea.

While building an ADU will add value to your property, it can generate income in terms of the wonderful tenants you would like to attract. This also creates better security as more people will be living on the property.

Going with the right contractor when building an ADU is important as they can either increase the rental you will receive or lower the price before you’ve even started advertising.

At Seven Home Improvement, we specialize in auxiliary dwelling units and will create a fully functional, comfortable and beautiful space for your future tenants, ensuring you receive the highest rental possible.

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