ADU Appraisals in CA

[Jessica Lawrence]

Now that the new 2020 California laws are in full effect, is anyone hearing anything about a change to the way that ADUs are appraised? So far everything I've read has said that appraisals of properties with ADUs tend to come in on the low side, usually because there aren't enough comps out there. If the state really wants people to start building a bunch of ADUs, shouldn't they also be encouraging appraisers to change their evaluation methods, for example comparing duplexes to SFHs with ADUs or comparing JADUs to traditional additions?

[Dan H.]

Originally posted by @Jessica Lawrence:

Thanks for the input, @Dan H.! It sounds like this might a good time to look for buy & hold properties that already have a (permitted) ADU, since they will be somewhat undervalued using current appraisal methods.

I agree that in most cases you can buy an RE with an existing ADU for less money and effort that paying someone to build one for you

However, a lot of people already own an RE that can have an ADU/JADU added, there are not a ton of RE with ADU for sale otherwise comps would be easy, some investors plan on saving money via a more active role in the ADU construction, and building your own ADU lets you select the lot, quality, design, etc.

There is a good chance my next RE purchase will be with intent to add an ADU. If someone had not beat me to the deal, I would have made a purchase in February. Agent is watching in case it falls out of escrow.