How to decide on the size of an ADU?

Question

Hello,

I am currently rehabbing a property in central coast California. In addition yo rehab work I also want to build an ADU. The lot size is approximately 10K sq.ft and the existing house size is about 1670 sq. ft. So the lot size is not much of a constraint especially with new offset requirements for 2020.

Now my question is strictly from the financial point of view, how do I go about deciding the size (sq.ft.) of the ADU? What are some of the considerations I should make?

As a side note, for now this house will be an investment property and will be rented out for a long time and possibly I will keep a room on the upper floor for myself. Eventually, I would retire in this house after 20-25 years.

Thanks in advance for your response.

Will Barnard · Answer

Simply go to my profile by clicking on my name in this post and send a request to connect, or do so direct from this thread post.

Jose Lopez · Answer

@Will Barnard That would be great. I have purchased the home since we last spoke and would like to hear sound advice from an investor like yourself on the next steps in building a junior ADU, local contact poeple(architects, engineers,etc) How do we go about connecting on this platform?

Jeff Cliff · Answer

Just a note to whoever maybe reading this thread. At least in CA with relaxed laws on ADUs one can have a Junior ADU (<= 500 sqft) within the confines of the existing walls and one regular ADU (attached or detached), total of two.

So if you are planning to build J/ADU within CA you might want to leave an option open for the the other for future.

Will Barnard · Answer

Yes, I live in Santa Clarita and my office is there too.

The $250k was an estimation for someone above based on a 1200 Sf max out. You should be under that if you go smaller and every site is different. Happy to take a look at your project if you like so I can better answer your questions.

Dan H. · Answer

1200' is a maximum that all areas must allow at least this size.  A jurisdiction can allow higher than state required allowed maximum but it is rare (but it appears I have one behind my house).

ADUs are not cheap to build, the $250K for 1200' 3/2 is likely fairly accurate.  This would also be without garage.

If you stay below 750' there are no impact fees which can save some money but I would not let it be a primary motivator.  I would only let it factor in if it were coming down to 800' with impact fees or 750' with no impact fees.  If I could build 1200', that is the size I would build and I would pay the impact fees.

Good luck

Jose Lopez · Answer

@Will Barnard hello. I see you are in Sant Clarita. I will be closing on a property there next week. I have RV space that I am planning on building an ADU on. Is the building permit process pretty easy? 250k for an adu build seems pricey.

Will Barnard · Answer

In CA, the ADU maxes out at 1200SF. That is a good size as you can easily get a 3 bed/ 2 bath layout out of that which could maximize your rental income. If this is a long term buy and hold, then building a 1200 SF ADU would likely be the best bet as you don’t have to pay for any new dirt/land. You should be able to build it out for about $250k and you then just need to calculate how much monthly/yearly rent you will get to determine how long it will take to recoup your investment.

Jeff Cliff · Answer

@Ben Tilbury & @Matthew Forrest,

Thank you both for your response.

Matthew Forrest · Answer

@Jeff Cliff I agree with @Ben Tilbury and think that big is better and the your should maximize usable living space. The bigger its is the lower the build cost per square foot should be. With a 10k sqft lot a max sized ADU should not look out of place.

Ben Tilbury · Answer

Most cities and/or counties have a size limit so just build up to your limit and maximize usuable living space if you can or do a two car garage below with living space above the garage. Here the more bedrooms the better so if you can fit 3 that’s great but the city or county you’re in may limit you to 2 depending on size allowed plus if you’re on city water and sewer vs septic that may play a factor as well because they may require a separate septic system which is $$$. Check with your local building department for the local ADU bylaws.