How to evaluate building an ADU vs. buying a SFR.
I recently spoke with a friend who lives in North Park (San Diego) in a 3 bedroom 1 bath. They are considering putting an ADU in the backyard and renting it out ocassionally and using it for family and guest that come into town. She's worried that the permitting process will be too challenging and so she's trying to evaluate should she:
A. Build an ADU in the backyard now, she can pay for it all with cash. (~100K)
B. Wait 2-3 years and save for a downpayment of a SFR and skip the whole ADU hassle.
I thought it was an interesting question. I think her goal is more to have a comfortable place for family to stay, but if you were motivated by cash flow, how would you assess this opportunity?