Do you own a house with an accessory dwelling unit (ADU)? Or are you planning on building an ADU on your property to rent it for additional income?
With the cost of living increasing, renting your ADU can help generate a steady income. However, figuring out how much to charge for rent can seem difficult to new landlords.
Below are a few tips and tricks to help you find the appropriate amount to rent your ADU for a while remaining competitive.
Like any investment property, one of the critical factors determining what you can charge for an ADU is the location. The location will form the baseline of rental rates. Many tenants look for specific areas when looking for a rental. Desirable establishments such as schools, parks, shopping centers, and hospitals can significantly affect rent.
The neighborhood where the ADU is being rented may not affect the rent prices too much. Though, being located in a quiet, friendly community is a bonus.
Naturally, the size of the ADU will directly affect the rental costs, the larger the space for rent, the more you can charge for it, though the size isn’t everything. The configuration of the ADU can also affect the rent. For example, an 800 square foot single bedroom, single bathroom (1/1) ADU can be simple to build but difficult to maximize the amount you can charge. Whereas the same size living space configured as a 2/1 or 2/2 can not only be significantly more profitable, in many cases, it can reach a broader market due to being more desirable.
Some of the first amenities asked for by tenants are access to a dishwasher, a washer, and a dryer. Being able to include these can help you find tenants. The more amenities you provide, the more rent you should expect. An updated kitchen with granite countertops and stainless steel appliances can be incredibly attractive to tenants.
Many tenants look to the outside as well as the inside of a rental space. Outdoor living areas, either private or shared, can let them go out for fresh air or enjoy the summer sun. Security features such as cameras, alarms, and security lights can provide a feeling of safety inside and outside of their home. Many tenants may also have pets. A
flexible pet policy can expand the pool of tenants looking for pet-friendly rentals. Though allowing pets can be risky as they can cause some damage to the property, this is often circumvented by having specific pet-related addendums on the lease.
The most straightforward way to understand how much you can charge for your ADU is by comparing similar rentals in your area. If you need more information on how much you can charge, a local property management company can help you price your rental.
Pricing your rental doesn’t need to be complicated. Renting your ADU should relieve financial stress, not cause more. If you are looking for a property management company local to Long Beach, consider calling us at (562) 888-0247, or feel free to fill out our
free rental analysis to see what your rental could yield today.
