Owner-Occupant ADU Build – Questions on Rent, Utilities & Insurance

[Pardhiv Karri]

Hi BP community,

I’m currently planning to build ADUs on my property in the South Bay Area (California) and will continue to live in the primary residence while renting out the new ADUs.

I'm approaching this as a long-term owner-occupant and looking to balance rental income with practicality, compliance, and tenant satisfaction. I’d appreciate insights from those who’ve done something similar.

Here are a few questions I’m hoping to get feedback on:

1. Appraisal Value for New ADUs
   When a detached ADU is newly built, how does it typically appraise compared to the main house? Is it valued at a similar price per sqft, or does it come in lower (and by roughly how much)?
2. Insurance Setup
   For those renting out ADUs while living onsite, do you maintain a combined homeowner + landlord policy, or do you separate coverage for the ADU? Any carrier recommendations or red flags?
3. Internet & Privacy
   If the ADU shares electrical service (possibly covered by solar), how do you typically handle internet? Is it better for tenants to have their own ISP line, or do you share Wi-Fi? If shared, how do you ensure network privacy for both parties?
4. Utility Submetering vs. Flat Rate
   For utilities like water, gas, and electricity—do you submeter and charge based on usage, or include utilities in the rent? I’d love to hear what’s been easiest to manage and fairest for tenants.
5. Rent Pricing Strategy as Owner-Occupant
   If you're renting out an ADU while living in the primary home, do you find that being onsite affects your ability to price at full market rate? Do tenants expect discounts for living next to the landlord, or does it not matter much?

Any input—whether you’ve done a similar project in the Bay Area or elsewhere—would be hugely appreciated. Thanks in advance!