Adding ADUs is One of the Fastest, Legal Ways an Opportunistic Property Owner Can Increase Revenue.
Multi-family property owners that are not looking into adding accessory dwelling units (ADUs) on their property/ies could be leaving money on the table. Making money on your investment is a primary goal of any smart investor. ADUs represent a fantastic way to expand the limits of your property’s ability to generate additional cash flow and maximize the number of rentable units on your property. They increase your property value in the long run, and they are a key driver of a positive return on investment overall.
ADUs Offer an Attractive Way to Collect Rent Right Away (aka, Immediate Cash Flow).
Rental property owners evaluating different avenues for increased profitability on their investments need to weigh their options. A capital improvement like a new roof, or increasing the curb appeal of a property, might seem like a good idea. That is, until you really dig into how you recoup those costs. Bay Area cities like San Francisco, Oakland and Berkeley have notoriously stringent rent control policies that aren’t getting any friendlier. That means you may not be able to raise rents enough to pay for a capital improvement any time soon.
When you build ADUs on your rental property, you’re turning space that isn’t generating any type of profit into rental income right away. That’s rental income at market rate, by the way. ADUs are relatively quick and cost-effective to build or convert compared to other types of residential construction. What’s more, you benefit from a 10-year 15 – year deferment on rent control in those units and then you follow Statewide rent control AB1482.
ADUs are also attractive because they help address the affordable housing shortage in the Bay Area (and throughout California). That’s why the state has streamlined the ADU process and made it possible for virtually all multi-family properties to add ADUs. In fact, in the Bay Area, you can convert up to 25% of your total number of existing units as ADUs as long as you’re doing it using non-livable space. Additionally, you may be able to build two more units if you have the available space and meet all of the requirements like setbacks from the property lines.
A shortage of housing in general means your additional units have an extremely high likelihood of staying rented. The fact that your units will be newly converted or newly built means you’ll likely be renting to quality residents who are happy to be living in a home that’s in good condition (and legal).
Opportunistic Rental Property Owners Turn to Adapt Dwellings to Add or Convert ADUs the Right Way.
Specializing in conversions, legalizations and multi-family properties, Adapt Dwellings is the Bay Area’s leading full-service, end-to-end ADU resource. Our team includes a state-licensed architect, a former local building inspector, and Adapt Dwellings, Inc., holds a Class B General Contractor License (CSLB#1098831). That means we can design and build your ADU, which is a unique benefit in what can be a complicated world of rental property ownership in the Bay Area.
We’re based in Oakland, one of the most popular cities for ADUs. Our deep industry expertise enables us to avoid potential problems and navigate getting your project completed successfully and responsibly.
At Adapt Dwellings, we can better understand your rental property investment goals because we are investors ourselves. Each of our projects begins with an Adapt Feasibility Study that enables us to walk you through a comprehensive and realistic view of the options you have to add habitable – and profitable – space using the ADU process. Our goal is to help you meet or exceed your rental property investment goals. We believe ADUs represent an excellent way to do that.
