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Utilizing your lot to earn extra rental income. Accessory Dwelling Units

Let say you have a small home, but you have a decent size lot. Well, this is perfect to create rental income. Let me walk through the process of making this happen. First step is to calculate your budget. If you have the money to spend then good, if not, there are loan options. You may get a home equity loan, construction loan or other various funding needs but you would need to contact your lender. The second step is to determine the size of your build. If you have a small lot, then don’t worry. There are ways to expand an ADU. Please contact us and we’ll send someone out to survey the area. If you want to convert your bedroom, or garage then the cost would be slightly less than building a new ADU due to existing structures. Don’t be surprised if the cost isn’t much less. It is much easier sometimes to put new framing than to do demolition work. Most ADU conversions are generally $180-200 per square foot to convert. A conversion can possible range from $40,000 to $50,000 for a 15x15. If you have the space for a new ADU in the backyard, then we highly suggest a new build. ADU with more than one bedroom can be rented out quick. A new adu will cost you roughly about $250,000 and if you took out a load then that mortgage will be about $1,500 per month. You can easily rent out that unit for $3,300 a month. That would generate an additional $1,800 per month of extra income. In 12 years your ADU would be paid off. After your mortgage is paid off, you’ll have an extra $3,300 a month of passive income. These earnings are enough to retire from. Of course, we won’t stop here. Why would you settle with one ADU? You can add another JADU, or if you have a big lot, then even you may apply for lot split, referring to the law article SB-9 lot splitting, allowing your lot to split into 4 dwellings. On top of that you may also add one ADU them as well. There is also the law SB10- that will allow you to build up to 10 dwellings. The list goes on and on. This may seem complicated but far from it, it is up to you to decide if you want to pursue the path. To make it easy all you need is an all-in-one developer to help put this together for you. You need money, a builder, and time. What do you think about t

his process? Is there something you are interested in? Let me know in the comments.

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