Ways To Convert Existing Structures into ADUs for Extra Income

Dustin Edwards • June 21, 2025

An accessory dwelling unit (ADU), also known as a granny flat, is a great way for new investors to test the waters of being a landlord. ADUs can be a great source of extra income, though the initial investment may be high. If you’re choosing to convert an existing structure, you can cut some of the costs while maximizing your potential income.


Today, we’ll go over how to convert unused rooms or garages into an ADU to earn extra monthly income.



Types of ADU

There are mainly two kinds of ADUs that we’re going to go over. A standard ADU, which is typically its own structure, is either built from the ground up or built using the existing frame of a previous structure, such as a garage. The other is a Junior ADU; these are typically smaller with different rules, though in California, they must be located within the existing walls of the primary home. 


A JADU is a great way for first-time landlords to make extra income while renting out a private room with its own entrance. JADUs are limited to 500 square feet and are contained within the walls of the primary residence. It will need its own kitchen, though the bathroom can be shared with the main house; however, this can deter
prospective tenants looking for more privacy. Other limiting factors include the homeowner living in either the JADU or the main house if you plan on renting it out. Though a JADU can be significantly more affordable than building a full-sized ADU.


In Long Beach, as of the summer of 2025, a standalone ADU can be up to 1200 square feet; it does need its own bathroom and kitchen. Keep in mind, you’ll need to provide parking for the residents of the ADU unless it's located within a half mile walking distance of public transit, as well as other exemptions. ADUs have an advantage in that you don't have to live within the property to list either the main home or the ADU for rent, meaning there is potential for a much higher return.


Converting a Garage into an ADU

Before converting a garage into an ADU, consider checking your local zoning laws and building codes first. These can change, which can slow down builds. Ensure you’re aware of any changes to building codes, or hire a reputable contractor to help out. Owners should consider planning for essential living features for prospective tenants. For example, flooring, at first, you may consider going for the cheapest option, though this can change if you plan on allowing pets, meaning you’ll want less carpet. To keep your future tenants feeling comfortable and safe, consider exterior lighting to improve visibility and deter thieves. Finally, if you intend to maximize privacy, there are many landscaping designs that can give each tenant a sense of privacy and safety.


Converting an Existing Room into JADU

When converting an existing room, it's important to pick the right one. If you already have a room with its own entrance, this will be ideal. Though if you don't already have a room with its own entrance, consider using an exterior, corner bedroom if one is available. You’ll have to install a lockable door to separate the JADU from the rest of the residence, and a kitchenette will also be needed, though this can be done with a sink, refrigerator, and basic cooking appliances. As previously stated, a bathroom is not required as it can be shared with the main home, though having a private bathroom can significantly increase your rental income.


For improved tenant comfort and satisfaction, consider adding noise-canceling insulation in walls that are shared or using noise-suppressing paint. Lighting both inside and outside of the JADU is also important here as well as it improves safety and makes the unit feel more inviting.


Converting an existing room or structure into an ADU or JADU is a practical way for landlords to start their real estate journey without needing to invest in a brand-new investment property. Keep in mind there are limitations and rules that can slow down build times, so knowing your local building codes and laws is important. If you need help understanding the regulations of building an ADU or you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our
Owner Application online.

Share this post

By Dustin Edwards • September 22, 2026
How Long Beach property management companies market rental properties: pricing, professional listings, multi-platform exposure, fast responses, and screening.
By Dustin Edwards • September 16, 2026
One of the most important steps in successful rental property management is tenant screening. While marketing attracts applicants and leasing fills vacancies, the screening process determines whether a tenant will be reliable, respectful of the property, and consistent with rent payments. For Long Beach property owners, proper tenant screening can mean the difference between stable rental income and ongoing management problems.  Professional property management companies in Long Beach use structured screening procedures to evaluate applicants carefully while remaining compliant with fair housing regulations. A strong screening process protects your property, your income, and your long-term investment. Why Tenant Screening Matters Tenant screening is designed to reduce risk before a lease is signed by evaluating applicant reliability. When landlords skip or rush this process, they increase the likelihood of avoidable issues. These may include late or missed rent payments , lease violations, or property damage. Additional risks include neighbor complaints and costly eviction proceedings. Replacing a problematic tenant can be expensive and time-consuming. Between lost rent, repairs, and vacancy periods , a single bad tenant placement can cost thousands of dollars. Professional rental property management prioritizes careful screening because prevention is far easier than resolving problems later. The Tenant Application Process The screening process begins with a rental application. A thorough application collects information needed to evaluate whether an applicant meets the property's rental criteria . Applications typically request: Personal identification information Employment and income details Rental history References from previous landlords Authorization for credit and background checks Property managers review this information to ensure the applicant meets established qualification standards. Consistency is critical; property management companies in Long Beach must evaluate applicants using the same criteria to remain compliant with fair housing laws. Credit History Evaluation Credit history is one of the most common factors considered during tenant screening because it reflects financial reliability. A credit report provides insight into an applicant's behavior over time. This includes payment history, outstanding debts, and collections accounts. It also shows credit utilization, which helps assess overall risk. While a credit score alone does not determine whether someone will be a good tenant, it helps identify patterns of financial responsibility. Professional Long Beach property management services evaluate credit reports carefully while also considering income stability and rental history. Some applicants with lower credit scores may still qualify if they demonstrate strong income and a reliable rental record. Income Verification and Affordability One of the most important indicators of whether a tenant can consistently pay rent is income stability. Property managers verify income to ensure that applicants can reasonably afford the monthly rent. A common guideline is that tenants should earn at least two-and-a-half to three times the monthly rent in gross income. Income verification may include reviewing: Recent pay stubs Employment verification Bank statements Tax returns for self-employed applicants This step helps ensure the tenant's financial situation supports consistent rent payments. Professional property management uses income verification to reduce the risk of late rent or financial hardship. Rental History and Previous Landlord References Past rental behavior is often one of the best indicators of future tenant behavior. Property managers typically contact previous landlords to verify information such as: Payment history Lease compliance Property condition upon move-out Whether the landlord would rent to the tenant again A strong rental history suggests the applicant understands tenant responsibilities and has demonstrated reliability in the past. Experienced property managers in Long Beach California pay close attention to rental history because it can reveal patterns that credit reports alone may not show. Background Screening and Compliance Background screening may also be part of the tenant evaluation process. This can include criminal history checks conducted in compliance with fair housing regulations. It is important that background screening is performed consistently and in accordance with local and state laws. California and many cities have regulations governing how criminal records can be considered in rental decisions. Professional property management companies in Long Beach stay current on these regulations to ensure that screening practices remain compliant. This protects property owners from potential legal risks related to discriminatory screening practices. Establishing Clear Rental Criteria Before screening applicants, property managers establish clear rental criteria. These criteria outline the minimum standards applicants must meet to qualify for the property. Typical criteria may address: Minimum income requirements Credit history expectations Rental history standards Occupancy limits By establishing criteria in advance, property managers ensure that all applicants are evaluated fairly and consistently. Clear criteria also help set expectations for applicants and streamline the approval process. The Importance of Fair Housing Compliance Tenant screening must always comply with federal, state, and local fair housing laws . Landlords cannot discriminate based on protected characteristics such as race, religion, national origin, disability, familial status, gender, sexual orientation, or other protected categories under California law. Professional property management in Long Beach California includes careful adherence to fair housing regulations throughout the screening process. Consistent procedures help ensure compliance while protecting property owners from legal exposure. Why Professional Tenant Screening Matters Tenant screening requires experience, attention to detail, and knowledge of legal guidelines. Many landlords underestimate how complex the process can be. Evaluating applications while maintaining compliance with fair housing laws and local regulations requires careful procedures. A property management company in Long Beach brings established systems and experience to the screening process. This helps property owners avoid common mistakes while improving the chances of placing the best tenants for their rental . When screening is handled professionally, landlords can feel more confident that their rental property is in good hands. The Long-Term Value of Careful Tenant Placement A good tenant can make rental ownership significantly easier. Responsible tenants pay rent on time, maintain the property, and communicate effectively when maintenance issues arise. Careful screening increases the likelihood of finding tenants who will remain in the property long-term. Long-term tenants reduce turnover costs , minimize vacancy periods, and create more stable rental income. Professional property management companies understand that tenant placement is one of the most important decisions in the entire rental process. How Beach Cities Management Screens Tenants At Beach Cities Management, our rental property management in Long Beach includes a structured tenant screening process designed to protect both property owners and tenants. Our screening procedures include: Comprehensive rental applications Credit and income verification Rental history checks Fair housing compliant evaluation standards Our goal is to place qualified tenants who will respect the property and maintain consistent rent payments. Ready for Professional Tenant Screening and Leasing? If you want help leasing and managing your rental property, professional Long Beach property management can simplify the process and reduce risk. Apply today through our **Owner Application** . Let Beach Cities Management handle tenant screening, leasing, and property management so you can focus on building long-term investment success.
By Dustin Edwards • September 15, 2026
How a well-written lease protects Long Beach landlords and tenants, what it must include, and how professional property management keeps leases compliant.
Show More