ADU/in-law unit in Newark, Bay area
Howdy BP folks,
I am firstimer, please bear my lengthy writeup.
Need some inputs for deciding to build ADU unit in side yard of my house.
Situation: Have a day job along with a kid. Cannot spend full time on the project. First time house buyer.
My homework so far:
Construction:
600 sqft allowed in my lot in Newark. Recent state laws have eased prices for utilities, approval processes.
Tiring part is with contractors; finding one for small projects, timely completion and extra costs. Typical quotes are $250 to $350+ per sqft. which would make project about $200K in total. Prefab homes upon additions (redesign for approval, amenities) would come close to $120K+ they are not guaranteed/proven yet. So i think better to go with traditional build up.
Finance:
With 50K in hand, I would need financing for $150K. with mortgage (20yrs), EMI comes to about 1.1K per month.
Typical rent is around $1800/month. accounting maintenance, tax, occupancy rate. there would be avg gain of $500/month.
My concerns:
Appraisal/Sell ability of main property after ADU.
Is time/effort in construction worth the effort? Is it better off with 50K invested elsewhere (ETFs/stocks)
Can I buy another property for 250K elsewhere and get slightly lower returns.
It would be great for me if you can provide inputs on any of these points, raise flags, suggestions.
Thanks in advance.