ADU / House Hacking in Annapolis, Maryland / Anne Arundel County

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ADU / House Hacking in Annapolis, Maryland / Anne Arundel County

Blake Wood
Real Estate Agent · San Diego, CA · Member since 2020 · 25 posts · 13 votes

Hello Bigger Pockets,

I am planning on moving to the Annapolis area in the next year and have a few questions on their rental and ADU laws.

In a perfect world my plan is to buy a house every year to live in, fix up, and convert a basement/attic/garage into an ADU. After a year, I would then move onto the next house while renting out both livable spaces in the previous house. I know AA County and Annapolis are very strict on their zoning laws and do not allow duplexes to be built on SFR lots but by being an owner occupier for a year, am I able to get around this? I know of people doing this in California, where I live now, to help offset the expensive prices but I am wondering if anyone has any experience doing this in Maryland.

Any other house hacking success stories in this area?  Would love to hear about them and connect!

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
3y

Short answer No. No need for a long answer.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y

    Short answer No. No need for a long answer.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    2Reply
  • Aaron S.
    Investor · MD · Member since 2020 · 5 posts · 2 votes
    3y

    I think Annapolis opened that opportunity up in 2021: https://www.annapolis.gov/1844...

    But obviously, check zoning: https://www.annapolis.gov/Faq....

    The other thing to note- you've got a limit on STR permits (don't believe there's a limit on long term). If you can find the right properties with available space, in theory you could do it, but there just aren't a ton of places that come available and fit the criteria... so scaling might be challenging. Also, I've seen/heard/etc. that permitting in historic Annapolis is not pretty so keep that in mind for extensive rehabs.

    1Reply
  • Blake Wood
    OP
    Real Estate Agent · San Diego, CA · Member since 2020 · 25 posts · 13 votes
    3y
    Quote from @Aaron S.:

    I think Annapolis opened that opportunity up in 2021: https://www.annapolis.gov/1844...

    But obviously, check zoning: https://www.annapolis.gov/Faq....

    The other thing to note- you've got a limit on STR permits (don't believe there's a limit on long term). If you can find the right properties with available space, in theory you could do it, but there just aren't a ton of places that come available and fit the criteria... so scaling might be challenging. Also, I've seen/heard/etc. that permitting in historic Annapolis is not pretty so keep that in mind for extensive rehabs.

    Thanks, Aaron. So I think the major question is, when I try to buy another house to live in, can I rent out both the ADU and the main house that I had been previously living in. I understand, at a basic level, the ADU laws in AA County and Annapolis but we wouldn't want to do this long term so I don't think the return would be there unless we could continue to rent out both spaces. @Russell Brazil, said it is not feasible.  In that case I would still lean towards doing a live in flip and then renting it out after a year to get started.   

    0Reply
  • Aaron S.
    Investor · MD · Member since 2020 · 5 posts · 2 votes
    3y

    On the ADU's specifically, I can't really comment. We have an up/down conversion where we rent the studio basement as a STR. But bc we're not zoned for 2 units, every year permitting checks for a cook top/stove. If we had one, we'd automatically be non-compliant bc of our zoning. We also can't have an ADU, so my guess is the two go hand in hand, and owner occupancy is less of a factor.

    1Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    3y
    Quote from @Blake Wood:
    Quote from @Aaron S.:

    I think Annapolis opened that opportunity up in 2021: https://www.annapolis.gov/1844...

    But obviously, check zoning: https://www.annapolis.gov/Faq....

    The other thing to note- you've got a limit on STR permits (don't believe there's a limit on long term). If you can find the right properties with available space, in theory you could do it, but there just aren't a ton of places that come available and fit the criteria... so scaling might be challenging. Also, I've seen/heard/etc. that permitting in historic Annapolis is not pretty so keep that in mind for extensive rehabs.

    Thanks, Aaron. So I think the major question is, when I try to buy another house to live in, can I rent out both the ADU and the main house that I had been previously living in. I understand, at a basic level, the ADU laws in AA County and Annapolis but we wouldn't want to do this long term so I don't think the return would be there unless we could continue to rent out both spaces. @Russell Brazil, said it is not feasible.  In that case I would still lean towards doing a live in flip and then renting it out after a year to get started.   

    As far as I’m aware pretty much anywhere in the metro area the adu is for owner occupants only, and tbh if you are only going to live there for a year it doesn’t really make sense cost wise to build one, you can in most of our jurisdictions convert the basement to an adu, though the only difference between that and renting the basement without the adu permit is you can add a stove.
    0Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    3y

    if the question is does having an ADU when you are legitimately an owner occupant allow you to rent the ADU and the main house when you leave--then the answer is almost certain to be NO. Check your local zoning regs online and it should show up pretty quick.

    0Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    3y

    If you look on facebook , you can find basement apts for rent in Anne Arundel county . Are they legal ?  Most likely no .  I can see the chances of getting caught in Annapolis higher than in the county . Muti family dwellings in the county like duplexes are rare , quads are even rarer . 

    I do know of some that have gotten permits for inlaw apts and they are supposed to be used for family , I have never heard of the inspectors ever checking .

    The problem in Annapolis would be the additional parking , they have residential parking permits . 

    People get away with ADUs all the time , until they get caught . 

    1Reply
  • Blake Wood
    OP
    Real Estate Agent · San Diego, CA · Member since 2020 · 25 posts · 13 votes
    3y
    Quote from @Jack Seiden:
    Quote from @Blake Wood:

    Got it. The only reason for the yearly timeline is for financing purposes. In the perfect situation I would essentially be turning single family homes into duplexes in a work around way by being an owner occupant during the permitting process. This is happening on pretty much every street in San Diego to help fight affordability challenges. I was not aware of the yearly inspections once the spaces is permitted to be rented out. So yes, if the ADU can't be rented once I make the main living quarters a rental, then it is a complete waste if we plan to move to a few houses in our first few years here.

    0Reply
  • Blake Wood
    OP
    Real Estate Agent · San Diego, CA · Member since 2020 · 25 posts · 13 votes
    3y
    Quote from @Jonathan R McLaughlin:

    if the question is does having an ADU when you are legitimately an owner occupant allow you to rent the ADU and the main house when you leave--then the answer is almost certain to be NO. Check your local zoning regs online and it should show up pretty quick.


     Thanks Jonathan - That is certainly the vibe I am getting from asking around but I have yet to see anything in black and white stating this.

    0Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    3y

    usually its stated via omission--ie. the zoning regs say owner occupants must occupy 1 of the units. Other things you see are "can't condo it" sometimes needs to stay on same utilities. 

    1Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    3y
    Quote from @Blake Wood:
    Quote from @Jack Seiden:
    Quote from @Blake Wood:

    Got it. The only reason for the yearly timeline is for financing purposes. In the perfect situation I would essentially be turning single family homes into duplexes in a work around way by being an owner occupant during the permitting process. This is happening on pretty much every street in San Diego to help fight affordability challenges. I was not aware of the yearly inspections once the spaces is permitted to be rented out. So yes, if the ADU can't be rented once I make the main living quarters a rental, then it is a complete waste if we plan to move to a few houses in our first few years here.


     You can however rent by the room once you move out, depends on the area but anywhere from 4-6 unrelated adults.

    2Reply
  • Justin Summers
    Member since 2020 · 65 posts · 17 votes
    3y

    Most cities and towns have annual rental inspections.   Try calling the local city office..   Also, curious why you are picking annapolis? The rental return vs purchase price would be better outside of Annapolis.  As others have stated if you are trying to maximize your return you would be better off renting out rooms in a house.. I know a few people that have bought 4 bedroom homes in Bowie or Crofton MD and rent out rooms for $1000 per month.  Also, as other's have said it's common for newer homes to finish the basement and rent out a basement apartment. 

    1Reply
  • Diane Dutt
    Rental Property Investor · MD · Member since 2021 · 13 posts · 4 votes
    3y

    Here it is in black and white as stated by Aa county zoning. 

    “An Accessory Dwelling Unit (in-law suite) is allowed in all residential districts with the exception of the R22 District and is defined as a second dwelling unit in an owner-occupied, single-family detached dwelling that occupies the lesser of a maximum of 1,000 square feet of floor area or one-third of the floor area of the dwelling. An accessory dwelling unit shall be located in a principal dwelling unit that is located on a lot of at least 14,000 square feet. No more than one accessory dwelling unit is allowed. The accessory dwelling unit may not be separated from the principal dwelling by an attached garage or by a breezeway, open or enclosed.”

    zoning code is typically not flexible when it comes to matters of density or minimum lot requirements. 

    I have a 4 bedroom home in Bowie and rent 3 of the furnished rooms to medium term rental tenants. 1100, 1200 & 1300… and do plan to rent my room when I move on to the next property. 

    1Reply
  • Pierre E.Pro Member
    Washington, DC · Member since 2016 · 129 posts · 42 votes
    3y
    Quote from @Diane Dutt:

    Here it is in black and white as stated by Aa county zoning. 

    “An Accessory Dwelling Unit (in-law suite) is allowed in all residential districts with the exception of the R22 District and is defined as a second dwelling unit in an owner-occupied, single-family detached dwelling that occupies the lesser of a maximum of 1,000 square feet of floor area or one-third of the floor area of the dwelling. An accessory dwelling unit shall be located in a principal dwelling unit that is located on a lot of at least 14,000 square feet. No more than one accessory dwelling unit is allowed. The accessory dwelling unit may not be separated from the principal dwelling by an attached garage or by a breezeway, open or enclosed.”

    zoning code is typically not flexible when it comes to matters of density or minimum lot requirements. 

    I have a 4 bedroom home in Bowie and rent 3 of the furnished rooms to medium term rental tenants. 1100, 1200 & 1300… and do plan to rent my room when I move on to the next property. 


     I would love to pick your brain on more of how this has been working for you!

    0Reply
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