LICENSED ACCESSORY DWELLING UNIT (ADU) CONTRACTOR IN LOS ANGELES, CA

ADUs are housing units built on a piece of property with an existing primary home or dwelling. These structures come in a variety of shapes and sizes that provide total customizability. ADUs can go by many names, such as guest houses, in-law suites, tiny homes, and granny flats, but they're all based around the same type of structure and purpose. These units have many benefits to offer property owners and can be built on multifamily lots and even single-family lots, as long as there's room. In addition, these dwellings feature their own entrances and many of the other amenities of a full-size home, such as a kitchen, living room, and bathroom. Not to mention, ADUs can be fully detached from your home as a stand-alone unit or attached to your house, either directly or through a conversion like a garage or a basement conversion. For a more detailed explanation of attached vs. detached ADUs, click here.

ADUs have gained skyrocketing popularity for various reasons. Whether you're looking for the perfect guest house for family and friends or want to increase your cash flow with passive rent income, ADUs are a popular choice. These tiny homes are the perfect way to add value to your property while creating a way to make a steady income. These units can be used in so many different ways, which is exactly why they're so popular now. In addition, with the new legislation in California that passed in January of 2020, their popularity has increased even further. Some of the new laws include ADU permits and make them automatically approved for single-family homes as well as permissions to build on multifamily properties. 

One of the most notable aspects of this new legislation that made building ADUs legal on a state level in California is that they invalidate any city ordinances. These new laws also permit the rebuilding of ADUs and make the entire process more manageable as a whole. ADUs can also be built in neighborhoods with HOAs, without the hassle commonly associated with an HOA. In addition, California cities must also approve ADU applications within 60 days, so there's no concern with waiting for months on end without hearing a verdict. Many more burdens have also been alleviated, including ADUs made prior to 2025 don't require the owner to live at the property, and ADUs can be constructed at the same time as the primary home. With all of this new legislation in effect, it has never been easier for Californians to build the perfect ADU to suit their needs. 

It's no secret that real estate and monthly rent prices are pretty high in the Bay Area. In fact, the average real estate costs in the Bar Area are roughly $1.3 million, and rent can be as much as $4,000 for a two or three-bedroom dwelling. So, as a property owner, one of the best investments you can make is in your property, whether it's your home itself or adding an ADU. 

Since California updated its laws regarding tiny homes, property owners can acquire instant equity just by building an ADU on their property. These units provide a cost-effective way to increase cash flow as well. For example, with starting costs ranging from just $350 to $400 per square foot, ADUs can pay for themselves over time. If you choose to rent out your ADU and your monthly payment is $700, you can charge an affordable rent of $1,600, which would net you $900 cash flow every single month. Even if you don't want to rent it out as a permanent residence for someone, you can use it as an Airbnb to create cash flow from your ADU investment. 

Finally, these tiny homes add incredible value to your property, which means your home equity will dramatically increase just by having an ADU on your property. Your home equity is the difference between what your property is currently worth and how much you still owe on it. Not to mention, there are many different options available to finance your ADU project, with monthly installments ranging between $650 and $1,300 on average. If you want to learn more about our ADU financing options, you can check out our financing section below. 

The cost to build an ADU can vary greatly depending on square footage, finishings, etc. However, a general rule of thumb is that a standard ADU can cost between $350 and $450 per square foot. The price per square foot will usually be less as your ADU gets larger, simply because there are a lot of standard costs no matter how big or small your ADU is such as plumbing and other utilities. Keep in mind that adding additional square footage to your accessory dwelling unit will almost always result in greater income opportunity, so do not be afraid of the up front cost when the return on investment is so great.

Building and ADU on your property is definitely a large expense and most of our customers require some sort of financing to make it possible. If you are wondering how to finance an ADU project, just let us know and we can provide you with many options from our lending partners. Please take a look at our ADU financing options section by clicking here.

Aside from the expensive cost of mortgages and rent in the Bay Area, this area is a costly place to need professional nursing care too. On average, nursing home costs are roughly $11,000 a month for a private room. However, these expensive nursing home expenses can be avoided while simultaneously adding equity to your property with an ADU. Other than renting them out for passive income, you can save money by utilizing your ADU as a nursing home alternative for the elderly loved ones in need of assisted living in your life. 

For example, ADU financing payments usually average approximately $650 to $1,300 per month. When compared to paying up to $11,000 per month for a nursing home facility, an ADU is a clear choice. Not to mention, using an ADU as a nursing home alternative will allow you to have more time with your loved ones in a comfortable place designed just for them, surrounded by the people that care about them the most. 

No matter if you always have friends or family over for an extended visit or if you simply want a place to spend a night or two out of the house with your spouse from time to time, ADUs make the perfect guest house. Not to mention, using your ADU as a guest house doesn't mean that they can't create cash flow opportunities. For example, you can host guests at y our ADU by using it as an AirBnB between visits from your family and friends. Your typical AirBnB in the San Francisco Bay Area costs about $250 to $300 per night. So, even if you're only renting your ADU out as an Airbnb about two to four times a month, its cash flow is paying for the monthly installment alone. If you have time to rent it out more often than that, you'll be covering your monthly payment and getting supplemental income at the same time while offering your family and friends a lovely place to stay when they're in town to visit.