What to Know About ADUs in California

Southern California is known for its sunshine and temperate climate. There’s no shortage of family entertainment in SoCal, either. With numerous theme parks including Disneyland, Knott’s Berry Farm and Six Flags (as well as others) all within close proximity, mountains and beaches, the region just about has it all!

As far as real estate goes, it’s no secret that prices can seem a bit high. The area is one of the most desirable places in the country in which to live. Where’s the opportunity though?

ADUs (Accessory Dwelling Units)

The recent changes that have taken place in the state of California related to accessory dwelling units, or ADUs, present a unique opportunity. The expansion of ADU guidelines may effectively make it possible to buy a single-family home and potentially turn it into a two-unit or, even in some cases, a three-unit property. Depending on a variety of factors related to each specific property, one could purchase a single-family home and possibly convert a detached garage into an ADU or construct an entirely new ADU structure on the property. In addition to the ADU, it’s also becoming possible to convert part of the existing footprint of a single-family home into a “Junior ADU.” How about that?!

Given that market rents (along with the aforementioned sale prices) in Southern California can also seem high, let’s say that you were able to purchase a second home with as little as 10 percent down payment and rent out the ADU or, alternatively, the main home. You would still have the unrented unit to occupy as your second home. Perhaps, for the right property, the rents from the main home and Junior ADU would cover just about your entire monthly payment and then you, yourself, would have the ADU to occupy as your secondary residence. Taking a single family home and adding the value of rental income with an ADU, a Junior ADU or BOTH seems to be an opportunity like none other we’ve seen.

Real estate is a realm where one size never fits all. Maybe finding a home with an ADU that’s already been constructed is best. Perhaps finding a home and constructing the ADU works better for you. Where does it all start? By talking with experts and appropriate trades-persons. When it comes to knowing all the experts, whether that’s a great mortgage lender, a contractor or an architect, consulting a great Realtor is a really good starting point.

Additionally, here is a link to the City of Los Angeles Ordinance and State laws regarding ADUs and JADUs.

I’m a local Southern California realtor in the city of Los Angeles with Jason Mitchell Real Estate California with 20 years of industry experience. If you have questions or want to discuss anything related to buying or selling real estate in the Los Angeles area, give me a call. –Ken Sisson, 310.308.8672, Ksisson@jasonmitchellgroup.com

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