RENT Magazine Q4 '22

If you are considering building an ADU, hiring a real estate agent who understands the value of ADUs is crucial. More and more real estate agents are tuning in to the ADU trend and stand ready to help, you can use this ADU registry find an ADU specialist. Living in the ADU and renting out the primary dwelling offers the opportunity to receive a higher monthly rent, creating a pathway to paying down mortgage and construction costs at a faster rate. If the jurisdiction allows for both the ADU and the primary dwelling to be rented out, as is the case on the West Coast, the return on investment is likely to be high. Building an ADU can be an excellent alternative to purchasing another investment property, particularly in high-priced markets where a deal is hard to find. While a newly-built ADU can cost upwards of $300k in some markets, a duplex in the same market might start in the $700k’s and require 20% down to purchase. The rents in the duplex may not be at market rate and legislation may impact the rate in which those rates can be increased. A newly-developed unit on a property already in a portfolio can fetch market rate upon completion, a strong case for building new. 3. More affordable than buying a new rental property BUILDING AN ADU CAN BE AN EXCELLENT ALTERNATIVE TO PURCHASING ANOTHER INVESTMENT PROPERTY, PARTICULARLY IN HIGH- PRICED MARKETS WHERE A DEAL IS HARD TO FIND.


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