ADU in Santa Clarita (Los Angeles County), CA

2 Replies

I'm looking at a property in Castaic (Santa Clarita) for a buy and hold. The numbers for the house by itself would not work, even after rehabbing. However, if I converted the attached garage into a JADU, it might. And then, if I add an ADU behind the house, it would definitely be a real good deal. But I'm not aware of many ADUs in the Santa Clarita Valley and how well they work. I would assume they'll rent well, but I just don't see them in the area. And then, I'm not sure if doing an ADU in the back and converting the garage would be too much... maybe just go for the ADU in the back? Finally, this would be my first real estate investment and part of my brain screams "What kind of crazy are you?" for taking on such a project to start. Any thoughts and experience would be welcome. Thanks.

For buy and hold, it's likely a solid plan. California permits you to have one JADU and one ADU (as it seems you are aware). Also there is the exemption that would allow you to rent the primary residence too. You'll probably break even on the initial increase in value to the property from building the ADU and not a ton more but the rental returns should be very attractive.

Throughout the state detached ADU's tend to rent a little better than internal conversions. As a guide, our 2 bedroom ADU has a total cost of between $180-200k all in so you're likely to see good returns on that. Happy to help scope it out further with you if that helped.

We are certainly seeing a ton more interest in home & income plays.

Depends on where in Castaic, how large the lot is and a few other things to consider. If you do a JADU, you are required to be an owner occupant of the main residence. For just the ADU, you can rent out the house and the ADU so that would be a better investment plan. The return on capital is quite good in most cases for ADU's as you already own the dirt so by having construction and other soft costs without the cost of the additional cost of the dirt, you get a good return.

The SFV is likely more conducive to your cash flow for this, but it is certainly possible in the SCV or even Castaic. 

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