Who Should Consider Adding a Granny Flat (ADU)
California enacted recent changes to Accessory Dwelling Units (ADU) in 2017 in response to the housing crisis experienced throughout California. Also known as granny flats, the statewide mandate changes removed barriers making ADUs viable and more affordable.
Renovation loans can finance income property additions including ADUs.
Who is looking for ADUs?
From millennial's to baby boomers, the severe housing shortage has become a significant impact on affordable long-term housing. Rent costs continue to escalate. Home values are rising faster. The sacrifice of disproportionate rent makes saving for that home down payment insurmountable.
California enacted recent changes to Accessory Dwelling Units (ADU) in 2017 in response to the housing crisis experienced throughout California. Also known as granny flats, the statewide mandate changes removed barriers making ADUs viable and more affordable.
Renovation loans can finance income property additions including ADUs.
Who is looking for ADUs?
From millennial's to baby boomers, the severe housing shortage has become a significant impact on affordable long-term housing. Rent costs continue to escalate. Home values are rising faster. The sacrifice of disproportionate rent makes saving for that home down payment insurmountable.
Baby Boomers need to take their next step as they enter retirement. Ideally, it means to stop working and live on fixed income. Healthcare and affordable long-term housing needs are paramount and the highest concern. The good news of living longer is dampen by financing it.
Some of the choices are hard. Planning out housing may mean to relocate to more affordable geographies both domestically or internationally. It will certainly impact your lifestyle.
For Baby Boomers, ADUs can present a couple of opportunities. A baby boomer can add an ADU to create rental income to supplement overall income. Rent out you current dwelling. You maximize your rental income by downsizing and move into the new ADU. Alternatively you can rent the new ADU to create attractive supplemental rental income.
Some of the choices are hard. Planning out housing may mean to relocate to more affordable geographies both domestically or internationally. It will certainly impact your lifestyle.
For Baby Boomers, ADUs can present a couple of opportunities. A baby boomer can add an ADU to create rental income to supplement overall income. Rent out you current dwelling. You maximize your rental income by downsizing and move into the new ADU. Alternatively you can rent the new ADU to create attractive supplemental rental income.
Take Care of Family - Even homeowners worry when family members struggle for housing needs. Parents entering retirement may struggle financially. The struggle of siblings or returning adults may need temporary assistance. There may be family members with impairments that have special long-term needs that are safe, accessible and affordable.
ADUs can be a solution. A 600 sq. ft. ADUs can cost around $120,000 that incurs $800 a month increase to your current mortgage payment. The net effect is 1 bedroom unit is costing you $800 per month. The market for a one bedroom apartment rental in San Diego is currently averaging $1,500.00. That's affordable long-term housing.
ADUs can be a solution. A 600 sq. ft. ADUs can cost around $120,000 that incurs $800 a month increase to your current mortgage payment. The net effect is 1 bedroom unit is costing you $800 per month. The market for a one bedroom apartment rental in San Diego is currently averaging $1,500.00. That's affordable long-term housing.
Create Income - Real Estate investing is a proven strategy to building wealth. In the current marketplace has favorable build costs compared to current property value. Consider building new construction utilizing rental-grade improvements. Your costs could range at $200 a sq. ft. The average current market value in San Diego is $449.00 sq. ft. Savvy real estate investors capitalize on this delta all day long. ADUs can put any homeowner in the real estate investment game to create long term rental income.
WHY ADUs Now? Never has been a better time. These changes results in major cost reductions. Removal of off street parking, utilizing existing plumbing/gas/electrical services and major reduction in permit fees translates into saving of tens of thousands of dollars.
- Off street parking not required within a 1/2 mile of public transportation
- Utilize existing services from main dwelling (electrical, plumbing & gas)
- Sprinklers only required when present in main dwelling
- Reduction of permit fees proportional to ADU
Financing - Equity vs Renovation Loans
Let's explore ways to finance ADUs. If you don’t available funds to cover construction costs, you can explore financing options leveraging your dwelling.
EQUITY - Homeowners can refinance their current home loan and utilize equity to cover the construction costs.
RENOVATION - If equity is insufficient you can consider a Renovation loan. Renovation loans offer another financing option with the same low rates. The advantage renovation loans offers over an equity loan, is the renovation funds are based on the future improvements.
Ready to Explore More?
Let's explore ways to finance ADUs. If you don’t available funds to cover construction costs, you can explore financing options leveraging your dwelling.
EQUITY - Homeowners can refinance their current home loan and utilize equity to cover the construction costs.
RENOVATION - If equity is insufficient you can consider a Renovation loan. Renovation loans offer another financing option with the same low rates. The advantage renovation loans offers over an equity loan, is the renovation funds are based on the future improvements.
Ready to Explore More?
SD203K.com is operated by Inspection Perfection, a home inspection company serving the greater San Diego area since 2005. Owner Will Johnson is a certified 203K HUD consultant since 2008.
For more information on inspection Perfection, please visit us at:
www.sdinspection.com
For more information on inspection Perfection, please visit us at:
www.sdinspection.com
