ADU vs STR Addition in Beach College Town - Howe should we start?
Hi-
Our family of four owns a two-bedroom in a great long-term rental/short-term rental location. We want to create extra space and build rental income. I would love input on these two options
600 second story square foot ADU
-$350-400K to build,
-rental income ~$3200-$4000/month,
-no STR options,
-faster permitting, no impact fees
560 second story addition with a separate entrance
-long-term rental income ~$2400/month
-STR rental income ~$4500-$6000/month
-slower permitting, impact fees incurred, would require fixing sidewalks per city code
We will be financing with a HELOC and live fulltime in the downstairs unit. We considered buying a rental property out of state to get started but 1) the cash flow opportunities on our own property, given the location pencil out better and 2) we would like the extra space for when our two kids are older and 2 bedrooms no longer works.
TIA!