How Can An ADU Provide Extra Living Space And Income?

Tom Ginsberg From Adore Homes May 16, 2023

Buyer

How Can An ADU Provide Extra Living Space And Income?
Why ADUs?
  • Have your family move near you
  • Earn rental income & reduce monthly payments – we can show you how!
  • Have an extra room for private working space
  • Increase your property’s value
  • Build offsite
  • Affordable housing solution (prices starts at $229,000 all-in)
 
CA Laws
ADU requirements

Every ADU must have…

  • A bathroom, kitchen(ette), and
  • Bedroom/Studio space
  • 4 ft lot line setbacks
  • 6 or 10 ft setbacks from other structures

 

All cities in California must…

  • Allow ADUs up to 800 sq ft
  • Waive parking requirements within 0.5mi of public transit
  • Respond to your plan submission within 60 days

 

Most cities must…

  • Allow ADUs up to 1000 sq ft or even 1,200 sq ft
  • Have permitted or are permitting ADORE projects (Bay Area)
 
Single-family Zoning (As of January 1, 2020)
  • Statewide consistent guidelines
  • 1 ADU and 1 JADU per lot
  • 60-days approval – ministerial
  • Reduced permit fees
  • No parking requirements (if w/n 1⁄2 mile of transit stop)
  • No owner occupancy laws
  • 4-ft. side and rear setbacks
  • Front yard ADU’s possible
 
Duplexes & multi-unit (As of January 1, 2020)
  • Existing multifamily dwellings qualify
  • 2 detached ADUs per multifamily lot
  • Developers can build ADUs concurrent with a new multi-family structure
 
 
Depending on your space

ADORE Homes offers the largest selection of models.

 
Flagship models
  • ADORE Crema 510 $267,900, all in
  • 510 SQ FT – 1 BR/1BA Dimensions: 34′ x 15′

 

  • ADORE Horizon 800 $313,900, all in
  • 800 SQ FT – 2 BR/2BA Dimensions: 40′ x 20′

 

  • ADORE Horizon 933 $319,900, all in
  • 933 SQ FT – 3BR/2BA Dimensions: 40′ x 23′ 4′′
 
Why NOW? (From the Realtor’s Perspective)
  • Sellers on the fence – add an ADU to increase your property value and be more appealing when its time to sell
  • Buyers

( a ) Target smaller homes that are ADU-feasible – deals close faster than the more expensive homes
( b ) Buy above desired monthly payment limit and use the ADU rental income to help with the mortgage payments.

 
Why NOW? (From the Homeowner’s Perspective)
  • Rising interest rates- Since early 2022, mortgage rates have climbed from 3% to over 6%
  • Housing market uncertainties- HUGE growth rates in housing prices for the last 3 years…with uncertain future
  • Erratic material costs- Fuel, lumber, labor, etc.
  • Bearish stock market- A looming recession?
 
But lastly…
  • The CalHFA funds are limited. First come, first serve basis.
  • A CalHFA grant can shave $40k off your ADU.
  • The CalHFA ADU grant offers qualifying homeowners up to $40,000 to offset pre-development and non-recurring closing costs.
 
How to Finance?
  • Home Loan- Cash-out refinance
    Home Equity Line of Credit (HELOC)
  • ADU Grant programs (for qualified homeowners)
  • Renovation or construction loan
  • Cash
  • Home equity contracts and other innovative financing
  • Other personal loans
 
Why ADORE Homes?
  • ADORE offers the largest selection of ADU models ranging from 378 sq ft – 2,400 sq ft
  • ADORE ADUs are pre-approved in cities — Cupertino, San Jose, Fremont, Napa and Sonoma Counties, and Santa Rosa
  • Budget-friendly
  • ADORE models can be customized to fit YOUR needs
  • Topnotch partner providers: Designers, Architects/ Engineers, Permitting Contractors
  • Excellent customer support experience
  • Specialized lenders in ADUs
  • Start to finish 6-8 months

We are Your GPS to Success Let’s Get Started

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