ADUs: What single-family investors need to know
As a single-family investor, you know how important it is to find new ways to increase your property value and maximize your real estate investment. In this article, we’ll provide an overview of Accessory Dwelling Units (ADUs) and their benefits to single-family investors to help you determine whether they’re a good fit for your property.
What is an ADU?
ADU stands for Accessory Dwelling Unit. ADUs are permanent structures that provide a fully-appointed living space in the backyard of an existing residential property. They can range from full custom mini-houses with plumbing fixtures and appliances to a dressed-up garage or shed. You might also know them as a backyard home, granny unit, in-law apartment, guest cottage, carriage house, secondary dwelling unit — the list goes on!
ADUs are used for a variety of reasons whether homeowners need extra space for working remotely, or want to provide separate housing for their adult children or aging parents, or are looking to bring in rental income.
Why single-family investors should consider ADUs?
For single-family home investors, ADUs represent an opportunity to bring in additional rental income on an investment property. As lawmakers recognize ADUs as a vital tool to solve today’s housing crisis, several states have introduced legislation to make adding a backyard home easier and more lucrative than ever.
For example, California legalized and reduced most fees for backyard homes in 2017. And under the state’s Prop 13, adding an ADU doesn’t trigger an increase on your property tax basis for your existing home — just on the improvement value.
Benefits of ADUs for single-family investors
ADUs offer real estate investors a number of benefits:
Increase your property value: ADUs boost your square footage, helping you maximize the value of your real estate investment.
Accelerate cash flow: ADUs allow real estate investors to collect additional rental income on a single-family property.
Shorten construction timelines: Prefabricated ADUs significantly simplify the construction process — meaning you’ll start generating rental income faster.
What does prefab mean?
Prefab refers to a prefabricated building, where manufacturers produce it in their facility and deliver it in a complete or near-complete state to the site. Units are inspected to state building code in the factory, just like if they were built on-site.
How Abodu works for single-family investors?
If you’ve self-managed a construction project in the past, you know it can be a headache. From dragged-out city permitting, lengthy and noisy construction, and financing red tape, the experience is often miserable for real estate investors.
Enter Abodu. Abodu simplifies the process of adding an ADU to your investment property. When you partner with us, we provide concierge-level service at every step — from permitting and design to off-site construction, delivery, and installation. Our collection of studio, one-bedroom, and two-bedroom ADUs are designed by world-class architects and include premium, customizable features.
Because we work with cities to pre-approve our permits, we can deliver drastically shorter project times. As a result, a typical Abodu full-service ADU project takes 4-6 weeks for permitting, and just 6 months to complete.
And single-family investors can rest assured that Abodu ADUs are built to state building codes to ensure you increase your property value well beyond the cost of the project.
Add an Abodu ADU in 3 steps:
1 Home visit
We meet you in person to check if your backyard is eligible for an ADU and confirm it’s a great fit for Abodu.
2 Customize & build
We handle everything from custom options and upgrades, to permits prior to building your Abodu home.
3 Delivery & install
Delivery & install
We walk you through your new Abodu and explain all the features, bells, whistles, and custom details.