More people in Santa Clara County are stepping up and are hiring experts to build an ADU to generate rental income in their area, which is in high demand for housing. ADUs are popular property additions because they provide a plethora of benefits. When homeowners are not using their ADU to generate rental income, they can use it to accommodate visiting friends and family, house aging family members, house older children, and many use ADUs as a flex space or a home office. However, this article is going to focus on how to work with your ADU builder to ensure that you can demand the highest possible rental prices in your area, where affordable housing is becoming more and more challenging to locate.
When You Build an ADU, Make Sure You are Set to Generate Enough Rental Income to Offset the Increase in Property Taxes
When you build an ADU on your lot, you significantly increase your property’s resale value. However, with that increase in value also comes a rise in property taxes. Unless you plan to get ordained on the internet and register your ADU as a place central to your religious practices, you will be paying more property taxes. That said, it is critical to work with Adore Homes to make sure the amount of rental income that you can generate will offset the property tax increase. Our experts will work by your side along the planning stages to make sure each decision is a strategic one dedicated to garnering you the best return. Also, if you are going to be a first-time landlord, you should also look into the taxes you will have to pay on the rental income itself. By building the right ADU design with the right features, you can maximize your investment and make sure you always come up in the green.
Build an ADU to be Fully Functional
One of the biggest mistakes people make when they build an ADU is to cut corners in order to save money on the upfront cost. For example, if a homeowner is building an ADU that is relatively near the pool house where there is a full bathroom, they may not include a bathroom assuming renters and guests can just use the one that’s close by. However, this will absolutely destroy your potential for generating good rental income, as people are looking for accommodations that offer convenience, and competition is fierce. That said, your ADU build should have the following:
- Fully functional bathroom (sink, shower, toilet)
- Full kitchen (stove, oven, microwave, refrigerator, counterspace, cabinets, room for appliances)
- Dedicated bedroom
- Living room or common area
- Closet
- Storage
- Heating and cooling
If you plan to build an ADU, make sure the design does not lack any of these critical components, or else you will be losing out on thousands of dollars over time in rental income.
Use Durable Yet Quality Materials when You Build an ADU
Unfortunately, a lot of renters simply don’t show the same level of care for an ADU they are renting, as opposed to one they actually own. That said, having to replace expensive components like flooring, countertops and backsplashes can be very expensive and eat into your ability to generate the most revenue. When you partner with Adore Homes, ask the builder to review some durable yet stylish materials they recommend in the build. Some of these can include the following:
- Counters – Marble may look amazing, but it stains very easily and requires maintenance. Marble is porous so it can easily absorb spills that permanently discolor the stone. Marble is also prone to scratches, and for these reasons, marble is not a good option for rental properties. Instead, consider soapstone, granite, sealed butcher block, concrete, or an engineered non-porous stone. These counters look amazing, offer a modern / contemporary look, and they will last for decades looking new year after year.
- Flooring – In today’s world of flooring options, ADU builders have a ton of options. Remember that you will want to avoid flooring that scratches easily. This means oak is not ideal. Laminate flooring has come a long way; you can buy wide or narrow laminate floorboards that look and feel like real wood, but that’s scratch-resistant and that will last forever. Laminate flooring comes in a number of grain patterns, colors, stains, and sizes.
- Cabinets – No need to go on the cheap side with “builder grade basics”; high-quality yet modestly proceed cabinets are eye-catching, and according to a Realtor.com survey, more than 90% of renters judge a property’s quality on the condition of the kitchen cabinets. Your ADU builder will have connections to high-quality cabinet builders and will be able to get a good price. Be sure to ask for the soft-close option. Not only will this help to prevent wear and tear on the cabinets, but renters love this feature.
- Storage – Renters will pay a premium if the ADU meets their storage needs. That said, having storage solutions for bicycles and other outdoor equipment is critical, and finding storage opportunities inside without compromising on floor plan space is also important.
Your ADU builder will be able to present you with a wide range of options that provide high style, durability, and all of the important things renters look for in a dwelling.
Hire an ADU Builder that has Style
Nobody will pay a premium to rent a “backyard cottage” that looks like their grandmother lived in it; you want a modern or contemporary build with neutral permanent fixtures, and a space that allows each renter to bring in their own color palette or design to make it homey. First of all, you will want the exterior of your ADU to compliment the architectural style of your primary house in order to create uniformity on the property. This will help to ensure you get the biggest possible resale value. As for interior style, clean white kitchens are in, as are grays, blacks, and whites with toned down color accents throughout. You will want to pick something trendy and aesthetically pleasing, but also something that will appeal to a wide range of people. Your ADU builders at Adore Homes will be able to help you with this.
Call Adore Homes for a Free Quote on Building an ADU
Ready to generate some rental income while improving your family’s lifestyle? Call Adore Homes for a free consultation; we will walk your property, take measurements, learn what your goals are in ADU ownership, and show you exactly how much revenue you can expect to make on your new rental property.