Given the steep trend of rent averages in the Bay area, it is no surprise that ADU vacancies are filling like hotcakes, and homeowners are making a significant amount of money from their rented units. Your ADU is well worth the investment, as it will most likely fill almost immediately.
While this may seem hard to believe, the housing market makes this possible. Trends show that more than 75% of homes house 1-2 person families. These houses, however, were built back when 3-4 person families were the average. This rate has been declining for several years, and nowadays, most families are small and do not need the amount room that an ordinary single-family home generally offers. Instead, they’re looking for something smaller and cheaper. Something exactly like your newly built ADU!
Generally speaking – the income generated from your ADU will not only cover maintenance and utility costs, but it will also pay for itself in as little as a few years – dependent on market fluctuations, of course.
If you want to calculate how long it will take your ADU to pay itself off, there are several calculators available online to help you out.
Also, if you choose to finance the construction of your ADU rather than pay it in cash, the rent generated by the ADU can even cover your loan payments for the ADU itself while still covering a range of other costs (and potentially your living expenses along the way).