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5 Reasons To Build an ADU on Your Rental Property

Dustin Edwards • Feb 07, 2024

An accessory dwelling unit (ADU) can be a great asset in developing your real estate portfolio or learning about the real estate industry. However, only a few people take advantage of ADUs' benefits. Not only are they a great source of passive income, but they’re also a great resource for individuals trying to get into the real estate industry without investing in a new rental property.


Below are five reasons you should consider building an ADU on your rental property.


Reason #1 Improved Property Value

An ADU can be seen as a safe investment. Building an ADU is seen as a reliable long-term investment. An ADU increases the living space of a property, and more living space means an increase in potential value. The potential increase to your property may vary based on the original size of the property, as well as the neighborhood. However, typically, people may see an increase in roughly 20% to 30% of the property’s value.


It's not only seen as a way to add value to your existing property, but an adu also has several versatile uses. They are often called a “granny flat” because they have been used to allow friends and family to live with you. However, if this isn't the case, you can always list your ADU as a long-term rental. 


Reason #2 Rental Income

Nowadays it's not uncommon for ADUs to be used as an additional rental income or a way to enter the real estate industry. This can provide you with a steady flow of income every month. When trying to see how much you can charge for rent for an ADU, you need to keep a few things in mind. While ADUs typically stand-alone and don't share walls, they are often priced like apartments. An excellent way to keep the rent competitive is to investigate how much apartments in or near your neighborhood go for. This can take some time to get right, though ensuring a competitive price is worth it as it keeps vacancies low. 


Reason #3 Using Unused Space

If the property you purchased happens to be in a large lot, why not take advantage of the space to build an ADU? In Long Beach, CA, the lot of your property needs to be a minimum of 5,200 square feet. The ADU itself can be 50% of the gross floor area of the primary dwelling or 800 square feet, whichever is less. An 800-square-foot ADU can accommodate a two-bedroom bathroom configuration. You can add features such as a private outdoor space and porch based on the rest of your property size.


Reason #4 Adaptability

An ADU is far more versatile than just a second house on your property. While you can build it and allow friends or family to live nearby, an ADU can also be built by converting a detached garage to save money on the build. Most people assume that the ADU gets listed and rented out. However, if the primary dwelling is significantly bigger than the ADU and you don't need that much space, why not live in the ADU and rent out the primary dwelling? 


This is where the adaptability of an ADU comes in. You can live in either residence while the other gets rented. Alternatively, if you purchase another home, you now have the option for two different sources of income. Finally, if you choose to live in the ADU, the main dwelling can be listed as a short-term rental on apps like Airbnb since ADUs don't qualify as short-term rentals in Long Beach.



Reason #5 Offset Living Expenses

Although building an 800-square-foot ADU can cost between $100,000.00 and $200,000.00 depending on the size if you're converting a garage and the configuration of the ADU, that being said, investing in an ADU can pay for itself in the long run. On average, the potential rental income you receive from the ADU is around $2,000, assuming it's a configuration with 800 square feet of living space. If you choose to live in the ADU and rent the main home, you can collect more rent. This is common for people looking to downsize after their kids move out or go to college.


An ADU is an excellent option for anyone looking for additional income. If you have an ADU you need help managing or are looking to
collect rent online, we invite you to call us today at (562) 888-0247 or fill out our Owner Application online.

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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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