5 Steps to Starting Your ADU in 2023 | Maxable Webinar Exclusive
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- Опубліковано 17 січ 2023
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We're calling it. 2023 is going to be the year you build an ADU on your property. Taking the first steps is going to feel daunting, but when you're equipped with the right knowledge and resources from Maxable, building an ADU can feel like a breeze.
TIMESTAMPS:
2:19 Why we're the ADU experts
4:00 Defining your ADU goals
9:08 New regulations
13:30 Custom vs prefab
19:47 Your financing options
25:21 Finding your designer
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WHAT IS AN ADU?
ADU stands for accessory dwelling unit. An ADU is a permanent additional housing structure built on a property that already has a main home or main structure. You may have heard them referred to as granny flats, casitas, guest houses, or in-law suites. They can be built on a single-family lot or multi-family lot (duplexes count as multi-family).
An ADU has its own entrance, separate from the primary house, as well as a kitchen, bathroom, and living space.
Accessory dwelling units can be rented year-round and add a lot of value to your property. They can be garage conversions, stand-alone units, attic or basement conversions, or be attached to the main house.
ADUs are exceptionally flexible, and most owners find that their use for the unit evolves over the years. The main reason people build ADUs in California is to house a relative, usually a parent but often an adult child. The second most common use is to rent for additional income.
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ADUs are an awesome opportunity! I converted my 200 sq ft garage into an ADU last summer! (just posted a video about it)
This was all great content! Thank you for sharing! My dream is to by a home with a good piece of land where I can build an ADU or two and create passive income, then later on in life house my parents & in-laws. This video motivates me to take that leap!
Wahoo! Glad our content could help. :) We have a lot more resources on our website maxablespace.com/
Is there a list of designer for JADU in the valley specifically Modesto/Turlock area
The cash flow numbers do not take into account a liability policy (to cover accidents with renters) and increase of property taxes. Always good to keep a savings for the ADU for when there are repairs or need to replace appliances, etc. Granted, nothing should happen when everything is brand new, just smart to plan on that "cash positive" to not be as much as you stated for at least a year until you see how the taxes, etc. pan out.
You beat me to it. He definitely didn’t take into account the cost increase of insurance or increased property taxes which is pretty important.
Personally, I see it as getting a mortgage reduction. The rent that comes in from an adu can potentially slash your mortgage by %50. That frees up money for other investments.
@@Darvineb86 Well due to how high interest rates are currently, it doesn't make sense to cash out refi. If you get a HELOC, rates are adjustable and that's a bad idea. If you pay cash you're talking about $100k minimum for a garage conversion to $250k+ for a stick build. These things aren't cheap. That kind of cash is not worth putting toward something that'll just reduce mortgage. You're better off buying multiple houses with that cash. Best way to build these ADUs is if you can get fixed 2nd rate debt on it. Everyone's situation will be different I would not invest in an ADU just to look at it as a "house hack."
@@sluggishincaliforniatv6741 I agree with all your points. ADUs aren’t cheap, but if you can cut your expenses by doing some of the work after passing rough inspection, then you’re probably looking at a total of 50k-70k. That’ll give you a better ROI than purchasing a SFH with 5% down, and definitely better than a multi family with a 25% down. Key is getting your hands dirty or knowing someone that knows how.
Depending on your build and where you live, you could get hit with a mandatory solar power install, and all electrical appliances. More unnecessary added expenses by local and state governments
what kind of financing options are out there if you don't have a mortgage?
maybe a construction loan?
I look at numerous videos on ADU's and everyone always talks about how affordable they can be and positive cash flow. No one ever mentions the ancillary costs such as increase in insurance premiums, monthly utility costs and most importantly your property taxes will be reassessed. If you live in Los Angeles County, any positive cash flow will be erased by your new property tax bill. So building an ADU in Los Angeles County is not a great idea. Another downside for rental property owners, the interest rate on financing is a half percent or greater on a loan.
You bring up some great points, Jose! We have a video coming out soon that addresses all of these concerns. Stay tuned.
Fantastic, I am looking forward to your videos, thank you.
Is there a list of ADU designers for Southern Cal? Specifically I’m in Santa Barbara
Absolutely! Send us an email at contact@maxablespace.com and we can connect you.
I have a utility poll in my back alley and the wires for my home and the house to the right and left of me stretch over my back yard these wires will need to be moved to accommodate a higher roof line if I build a ADU...who’s is responsible for moving these wires me or the power company? I think they could have ran the wires down the line instead of just stretching them over my property line but I’m no electrician 😀
The utility company is responsible for the connection but your contractor/electrician is responsible for getting the area site ready for the connections.
They are going to charge you for any utilizes you want in a spot they will tell you that they are no charities
Overpriced