It is arguable that people mostly construct ADUs to create dwelling space for families and maximize value. However, there might be other reasons, and passive inflow of income generated from rentals comes just directly after in the pecking order. It is not far-fetched to say that you can help yourself with some supplementary source of income and make out a great contingency plan for retirement and savings when you choose to be a landlord.
An ADU rental is similar to an apartment rental in that it is a privately held property that a landlord leases out to inhabitants. As we shall see later, these rentals may be long-term or short-term, depending on the landlord’s requirements and wants, as well as local rules.
As the worry about a shortage of affordable housing grows, several governments are loosening single-family zoning laws. Developers and private homeowners alike have the chance to contribute to the solution of this issue. Some communities are even offering incentives to homeowners to build these “backyard houses.”
Property Value and Tax Increase
Your home’s worth (and taxes) will rise. With the installation of a mother-in-law suite Campbell, the value of your home will increase significantly. Therefore your taxes might very well rise by 1-2 percent. Your property will be subject to a “blended assessment,” which means that the assessed value of your house will not change, but the assessed value of the ADU will be added to the total property value. However, remember that renting out the room will undoubtedly cover a significant percentage of these costs.
What is required of you as a landlord?
Being a landlord may be the most challenging aspect of the whole process. Do your homework if you are thinking of being a first-time landlord! Renting out your ADU is not as easy as constructing the structure and accepting payment to live there. You must think about your rent terms, energy bills, how you will share outdoor areas and laundry (if not included in the ADU), parking, etc.
However, you should not allow these issues to dissuade you from building an ADU for rental reasons. Being a landlord does not get any easier than maintaining a home you also live in. You may always hire or talk with a competent property management firm. Hiring a professional property manager saves you time and hassle while also providing experience and knowledge. Properties maintained by a qualified business also have lower vacancy rates.
Determining your rent charge
To begin, look at comparable properties in your region to know how much rent you may charge for your ADU.
Take your facilities into account next.
Installing a washer and dryer is a novel idea to explore if you want to attract more people to your ADU.
If you wish to include these features in your unit, be prepared to explain all that to your developer so that they would include them in the designs.
Examine the location of your property
ADUs situated near famous sites, such as fashion retail stores or a university, colleges, or other institutions, are bound to command somewhat higher rents. In comparison, ADUs located in suburban or rural regions benefit from cheaper rents.