Hey everyone. I am currently looking at a house in the 1.2mm range. I believe I can rent the house for 3500-4000. The home has a detached garage. My payments on the property will likely be 5500 per month. I was planning on converting a detached garage into an ADU. After converting the garage, I was planning on living in the ADU and renting out the main house. The cool part is that the home is 1/3 of a mile away from the metro station.
Does it make sense for me to convert a garage in the 1.2mm range? Do tenants renting out homes not want to rent a home that has a parking space but not garage parking? The backyard space is small, but I was planning on dividing up the backyard with bushes so that it is private for the ADU and also the main house.
Real Estate Agent · Member since 2020 · 139 posts · 103 votes
5y
Let me start this off by saying the building is HARD! And getting the permits and zoning required to do this especially in California is probably HARDER!
Don't let this stray you though, some of the best wealth to be made comes from hard work and sweat equity! As Brandon said in a recent BP podcast, "Run at hard".
The average cost for adding an 800 sq ADU in California is $150,000. So make sure you have the funds, and be prepared to go over your budget.
Also, you will need a very competent group of engineers and contractors, to do this correctly.
Do plenty of due diligence and give your municipality zoning board to get the ball rolling.
If you have any other questions don't hesitate to contact me!
Real Estate Agent · Member since 2020 · 139 posts · 103 votes
5y
Let me start this off by saying the building is HARD! And getting the permits and zoning required to do this especially in California is probably HARDER!
Don't let this stray you though, some of the best wealth to be made comes from hard work and sweat equity! As Brandon said in a recent BP podcast, "Run at hard".
The average cost for adding an 800 sq ADU in California is $150,000. So make sure you have the funds, and be prepared to go over your budget.
Also, you will need a very competent group of engineers and contractors, to do this correctly.
Do plenty of due diligence and give your municipality zoning board to get the ball rolling.
If you have any other questions don't hesitate to contact me!
The garage is 400 sq feet or so so I think the fees would be roughly around 80-90k. I've read that LA has recently made the laws more favorable for ADUs.
Does it make sense to put an ADU on a property that is valued so high? My fear is that people wouldn't want to rent out a place in the 4k range if it has an ADU and no garage parking.
I'm doing the same thing on a 600k property, but building it in the backyard. Main house will still have garage and rent for $3,200. 800 sq foot ADU $1,800 - $2,100. At your price point, renters may expect a garage unless it has a lot of bedrooms that the perfect family needs (5 or more).
The garage is 400 sq feet or so so I think the fees would be roughly around 80-90k. I've read that LA has recently made the laws more favorable for ADUs.
Does it make sense to put an ADU on a property that is valued so high? My fear is that people wouldn't want to rent out a place in the 4k range if it has an ADU and no garage parking.
Dave,
I think the ADU is worth it. I live in a duplex and rent the other unit for almost $5000/month. There's a one-car garage that my tenant's Audi barely fits in, so he parks it on the street most of the time. A house rented at $4000 isn't exactly a luxury listing in LA!
I'd be happy to give you a more informed opinion if you PM me the address.
Also, don't listen to advice from out-of-staters. In LA, the only permitting process that isn't a headache is the ADU permit process. And with so many architects and GCs capitalizing on the ADU craze, it's never been easier.