When building an accessory dwelling unit, or ADU, you may be wondering if it’s worth the investment.
It’s difficult to calculate if an ADU will be a good investment. In some cases, you won’t know until you decide to move or sell the property.
Let’s take a look at some key questions to ask yourself before building an ADU.
Did you go through the proper legal matters, plans and permits? This is very important if you’re ever planning on selling or refinancing your property. If you didn’t make the property lawful, it will prevent lenders from lending money.
You will also have to worry about code enforcement. Without the proper permission, you can count on having to pay fines and/or remove your ADU from your property, depending on the current laws of your city.
Zoning ordinances can sometimes get confusing with all the jargon, so don’t hesitate to get a lawyer if you need to.
After making an ADU lawful, is it worth it? You have the zoning ordinance, now look and see which restrictions or requirements the government will ask. Below are three common items you will see on a zoning ordinance.
Is there additional parking that will need to be built?
Are there specific instructions on the location of the detached ADU?
Did they approve an attached ADU, but not a detached?
If the zoning ordinance made it to where you cannot feasibly build an ADU, seek out a variance. However, this can add cost and it’s not guaranteed. It’s best to see if it will work to build an ADU on your property if not, there are other options.
How do you find out exactly how much to rent it out for? Finding solid, reliable data on this may be tricky. It’s important to do the research in order to see your return investment.
There are some real estate agents that deal with investment properties. You can also talk to other property managers, property owners, and your local craigslist to get some ideas on what property in your area is going for.
Are you financing the ADU construction? Of course, if you have the cash in your pocket you’re one step ahead, but not everyone is that lucky.
If you have equity on your home, you may qualify for a refinance, then be able to get the cash for the construction. If you have a steady job, with a steady income, you may be able to speak to someone about a renovation loan.
Talk with a lender first to get an estimate on the fees, because it will cost you when you start paying back the interest.
In the L.A. area, it’s not difficult to get the ADU you’ve always wanted. With some persistence, dedication, and research, you will be well on your way to the add-on of your dreams. [https://leviconstruction.com/]
At Levi Construction we’ve dedicated ourselves to the building of beautiful homes. We pride ourselves on the quality of work over profit. Since 2013 we’ve been delivering top-notch work to our customers. Contact us today for an estimate on your ADU!