Can I rent out SFH with an ADU?

Question

Hi I am planning to buy a property in West Columbia, SC and I wanted to know if other investors in that area have experience with renting out an SFH with an ADU? Can I rent out both to different tenants? Does the ADU have to be owner-occupied? Are there any pitfalls or advice you can give me about this scenario?

Thanks!

Theresa Harris · Answer

As long as the ADU is legal (and even then some still would), you can rent both separately. Make it clear in your leases who has access to what spaces (parking, yard), who is responsible for what space (ie lawn) and how the utilities will work. Are the utilities on separate meters?  Is there laundry in each unit or is it shared?

Kevin Johnson · Answer

The county will have records of any permits that have been filed for a property!  Check with them for confirmation  :)

Theresa Harris · Answer

Check with the town hall.  There should be a permit.

Qais Attarwala · Answer

How do I find out if the ADU is legal/permitted? Do I just contact my county accessor? Do I have to request blueprints of the home and as long as the blueprints contain the ADU should I be safe? If I have the seller say in writing that the ADU was legally built (and I think according to my county rules it has to have been legally built prior to 2004 for it to be a legal dwelling unit) does that protect me?

Thank you in advance.

Theresa Harris · Answer

If the water meter is shared, you have two options: 1) include water in the rent (add a buffer as tenants tend to use more if they aren't paying) or 2) split the water between the two units.  If you split it, do it based on the number of people in each unit.  So if there are 2 people living in the house and 1 in the ADU, 67% of the bill is charged to the house and 33% to the ADU.  Every time you get the bill, you let each know how much they owe and they can add that to next month's rent.  I have a couple of places where the tenants can't get the water in their name (rules from the water company), so I get the bill every 3 months, let them know how much it is, and they add it to the next rent.

Kevin Johnson · Answer

My recommendation would be to pay for that specific utility if the meter is shared.  It would be impossible to split the cost evenly between the tenants...  you may be able to set a slightly higher rental rate for including utilities as well!

Qais Attarwala · Answer

@Theresa Harris the power is on different meters but I think the water meter is shared between the ADU and the house. Do you think this would be an issue? There is a laundry in each unit.

Kevin Johnson · Answer

Absolutely!  I've seen this a lot, both short-term and long-term rentals.  If you need any help on the acquisition side let me know!

Can I rent out SFH with an ADU?

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