Recent changes to California codes are opening up new options for further development on single-family lots. For homeowners who would like to invest in income-producing real estate and also want to keep a close eye on their tenants, an additional dwelling unit (ADU) can be a great option. I spoke with a civil engineer from Glendora who examined a case of a 1,080 SF existing single-family home set on a 6,800 SF lot with a 2-car garage, and she determined a 1,200 SF additional dwelling unit could be built on the available lot area. In that area, it could rent for $2,300 to $2,500 per month. A typical investor would probably pay around $300,000 to command that kind of revenue.
If you would like to explore this option, here is a basic process you can follow:
- Consider how constructing another building or adding to the existing home would impact the utility of the lot.
- Have a civil engineer help you understand the optimal building area and how to prepare the site.
- Have a contractor give a ballpark price for building the ADU.
- Have us help you determine market rent if you plan to rent out your ADU.
- Contact a lender about financing options.
- Confirm the financial pieces make sense.
- Have an architect draw the plans and get them approved.
- Build and enjoy.
Want to explore your real estate possibilities? Call or text me at 626.328.4199.