It's time to start thinking about your future and taking steps to improve your credit score. If you already have great credit, then let's consider applying for a loan to make your investment plans a reality.
For a garage conversion, you'll need around 125k, or 250k for a new ADU construction. If you want upgraded features, add another 100k to the budget. The way to pay back your loan is to become a landlord and generate income by renting out your unit.
A nicely upgraded converted garage can be rented out for about $1500 a month. In 7 years, you could earn around 126,000, but remember it'll take 8 years since the ADU construction may take one year, and you'll likely be making loan payments from the moment you start using the funds until the unit is ready to be rented out.
For a new addition ADU, a loan of 250k may be paid back by renting the unit for 2,500-3000 a month. You could even consider having multiple roommates to increase the rental income, following the house hacking strategy.
House hacking means renting out the unit to multiple people who prefer living with roommates. Offering amenities and creating a social setting can justify higher rental charges. Managing multiple tenants successfully can lead to extra income from your investment.
Keep in mind that the value of your entire property will increase with these new additions, but be cautious about taking on that loan to finance the venture. An extra 100k for upgrades is a nice investment because it will further increase your property value.
Although it's a risky venture, the low risk is associated with the stability of the housing market and consistent rental demand. Attracting more renters by making the unit attractive is crucial, so ensure your area is desirable to live in.
Once you've earned back your investment, the monthly renter's income becomes a lifelong income stream. This is a smart investment strategy that I highly recommend. To make things easier, consider an all-in-one contractor who can handle permits, interior design, and build new constructions while connecting you with proper loan agents. This streamlines the process, minimizing frustrations and ensuring efficient completion.
So, are you ready to take the leap? If you need assistance, don't hesitate to contact us. Let's get started on securing your future! 💼🏠💰