All About ADU's in Los Angeles

What is an ADU?

ADU’s in Los Angeles and all over the nation have been super popularized in the past several years.

ADU stands for accessory dwelling unit. It’s a living space that can be attached to your property or detached and separate. Typically, ADUs have a living room, one or two bedrooms, a kitchen, and one or two bathrooms. For a detached ADU, it has a minimum of 150 square feet and a maximum of 1200 square feet.  It’s an excellent option to provide a whole other living space for guests or your family, or you can legally rent it out as an apartment as well.

ADUs are a win-win for everyone, whether you’re a buyer, seller, renter, or just a homeowner looking for a little more space or some extra cash. Let’s dive deeper into the value an ADU can bring you.

Reasons to Build an ADU

1. Equity

Having that extra living space and option for rental income instantly gives your home more value. In fact, detached ADU’s in Los Angeles have the potential to increase your property value by 20-30%. With it costing around $100,000 to build your average ADU, this is well worth the investment. If your home is worth $800,000 without an ADU, if done right your property value could increase to $1,040,000. The average ADU costs anywhere from $50,000 – $300,000. If it cost you $150,000 to build this ADU, that gives you $90,000 in total equity.

2. Income

The average rent for a 2-bedroom apartment in Sherman Oaks is a whopping $2700 a month. Renting out an ADU can take off a very decent chunk of your mortgage. You also can most likely get a permit to Airbnb your ADU (Check out our latest blog post on short term rentals here) and earn double, or even triple the expected long term rental amount.

3. More space without the price tag

The cost of buying a home and building an ADU is typically a lot less expensive than buying a home already with that extra square footage and bedrooms built in. It’s a unique alternative to have more space without the price tag, and guests, family, or renters are sure to enjoy it.

Reasons to Buy a House with an ADU

Buying a house with an ADU gives you all of the benefits of building without any headache. You will still gain equity by having it, the chance to make income, and more space. You’ll most likely be able to get a better deal on a property that’s the same size but split into a main house and an ADU rather than the same only in one main home, so it is cost effective as a home buyer.

interior with dog on floor

Reasons to Rent an ADU

As a renter, an ADU can certainly be appealing. For those that want to feel like they are in their own home rather than in a large apartment complex, ADU’s are an amazing, unique option. This is why ADU’s do not stay on the market very long and are snatched up by excited renters!

 

 

Looking to buy or sell? Contact us to learn more about how Katz Group LA can assist with all your real estate needs.