Blog Post

Why Aren’t More People Building ADUs for their Properties?

Dustin Edwards • Mar 12, 2021

An ADU adds Income and can Increase Property Value

ADU in Rear of Property
Looking at the value that an ADU can provide to a single family home, residential income property, or a multifamily property it is often surprising we don’t see a larger amount of development. To shed some light on why you might not be seeing as many ADUs developed as you might think possible we invite you to consider the following:

#1 - Many aren’t Aware that an ADU is an Option

When was the last time you were at a party and said “wow, can you believe the updates they made to the California Building Code this year?” ? Our guess is that you haven’t said that in quite some time...if at all and this is really why there aren’t more ADUs throughout California. The State Legislature has made a concerted effort to ensure that cities throughout California make updates to their local building codes to encourage development of ADUs but you won’t be seeing a flashy commercial campaign anytime soon.  

The reality is that many people aren’t aware that building an ADU and renting it is an option. While the state legislature has developed regulations to help each municipality it is up to each city to implement that guidance. This means that some cities haven’t adopted the state’s guidance (don’t worry Long Beach and nearby Lakewood have ADU guidelines to name just a few).

By understanding that ADUs are an option for your single family home or multi-family property you are ahead of the competition and can plan for the best possible addition to your property.

#2 - Some People aren’t Sure How an ADU would Rent

This is one of the head scratching moments as a property management company. When people try to initially compare a detached ADU they have trouble finding other “comparables”...largely due to the fact they are looking for other detached ADUs. The reality is that a detached ADU is nearly identical to that of many “2 on a lot” duplexes in Long Beach. Finding duplexes in Long Beach that are “two on a lot” are certainly a rarity and in high demand from renters.  

Detached ADUs offer the same element of privacy that is often found with a “2 on a lot” and that is difficult to find in a traditional apartment setting. We certainly understand not initially building an ADU due to being unsure of how it would rent. To understand rental potential of a proposed ADU we recommend speaking with a Long Beach Property Management company to understand the days on market of detached units, rental amounts, and longevity of the planned unit you intend to build. When you have the data in hand it will give you the confidence to build the detached ADU to your planned specification or make adjustments as necessary.

#3 - Financing Options are Limited for ADUs

Unlike purchasing a single family home, residential income property, or even a commercial apartment building there aren’t the same financing options available for ADUs. As ADUs fall under the expansion of an existing property they tend to fall under a construction loan agreement. Of course if you have looked into construction financing you might have found that your plans aren’t quite the size of loan that most lenders would prefer and the terms might not be to your liking either.

Construction financing is generally designed to be for the construction period and then converted to a permanent loan, but then what do you do if you have an existing loan on your income property or single family residence? This financing challenge is one element that has held back the increased development of ADUs. Property owners that have been successful in ADU development have generally used their own cash resources or a HELOC (home equity line of credit) to develop the property.

Finding a way to develop an ADU to ensure it maximizes your property value can be a challenge. If you’d like guidance on how to approach developing an ADU for your single family or income property we invite you to call us today at (562) 888-0247 as we’d be happy to help. When you want a quick check to see how much your property could fetch in rent we invite you to fill out our Free Rental Analysis where we perform a comprehensive comparison to share your rental stacks up to the competition.
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By Dustin Edwards 01 May, 2024
Everyone wants to feel safe in their homes. As an investment property owner, it's up to you to decide whether or not to include security measures in your property. Many of the costs associated with the security measures can be included in the rent, meaning not only can you keep your property safe, but you can earn more income in the long run. However, you would still want your tenants to have renters insurance to protect their assets. Today, we’ll discuss the top five security measures you can add to your property and why they're beneficial to you and your tenant. Security Cameras Cameras are probably one of the first security measures people think about when asked about security. Cameras provide more benefits than just surveillance. They provide an extra level of security for the safety of the tenants and their belongings. Additionally, security cameras can be useful when repairs are required. Cameras can aid in supervising repairs and maintenance to ensure you’re receiving the agreed-upon work. During vacancies when the property is empty, security cameras can help keep the property safe from potential intruders. Doorbell cameras are incredibly popular now. They provide the aforementioned safety of a camera that can be accessed remotely, as well as the ability to communicate with visitors. Although one must be careful never to say you're not home, just say you're unavailable to strangers. Security Lights Security lights with motion detectors are another effective tool when adding security measures to your property. These lights brightly if a potential intruder attempts to get near your home. They can provide enough illumination to see the intruder or, at the very least, scare them off. Nowadays, you can find a combination of security cameras and motion-activated security lights, such as the floodlight cam wired plus from Ring . Additionally, because these lights only turn on when motion is detected, they’re more cost-effective than traditional lights with a switch. Illuminate the Property Light generally deters intruders as it's more difficult to hide. Adding lighting to the landscaping can increase the security of the property while creating a relaxing atmosphere. Lights can also be used in other areas of the property to accent features such as trees, benches, or artwork. This can help your property stand out while giving your tenants an additional feeling of safety. Keyless Entry Keyless entry is seen as both a convenience feature and a security feature. They usually use an electronic passcode, biometric data, or grant access through a smartphone app. Physical keys can be lost, stolen, or duplicated. You reduce the risk of unauthorized entry by eliminating the need for a physical key to enter the property. Many keyless entry systems include several features, such as remote locking and monitoring. Although keyless entry is a great new technology for keeping your tenants and properties safe, they’re best used with other security systems. Security Company Nothing beats having an extra pair of eyes on your property for security. This is where security companies like ADT and SimpliSafe come in. While companies may deal with security in varying ways, they aim to protect your investment. While safety is the primary role of a security company, remember that many tenants may be willing to pay more for a premium amenity like a home security company. Keeping your property and tenants safe is incredibly important to the longevity of an investment property. If you’re looking to improve the security of your Long Beach rental property or need help managing your beach city rental property, we invite you to call us today at (562) 888-0247 or fill out our Owner Application online .
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