Can You Rent an ADU? Here’s What You Need To Know

July 20, 2021

Accessory dwelling units (ADUs) have become an increasingly common addition to homes all across America. They are especially welcome in California, where the state has passed ADU-friendly laws to tackle its housing crisis. However, despite these laws, some local jurisdictions are not as friendly to ADU backyard homes. So, can you rent an ADU, and what should you consider before you do?

The Applicable Regulations

Regulations and restrictions may come in many forms, and it's essential to check each one before proceeding. For example, state laws may sometimes supersede local laws, but there could also be local ordinances. Homeowners' associations could also have rules regarding how people can use their property and what they can add to their homes.

The good news is that even restrictions and regulations might not restrict you forever. Some counties, for instance, issue conditional use permits that allow homeowners to use their properties in unconventional ways. Similarly, HOA rules can be changed from within if you get enough homeowners on board.

The Property Design

Some property designs are ideal for adding an ADU home. In these instances, you already have the basic shell to transform the space into habitable quarters. Having a large yard also opens up opportunities. Keep in mind that most areas with planning and zoning departments have setback laws regarding how close buildings can be to property lines, streets, or other properties.

If your property isn't ideal, there are usually ways to work around this. Once again, conditional use permits might allow you to legally work around some of the property's shortcomings. Failing this, you might need to cough up extra cash to build something that works.

The Location

Some people post their Airbnbs online and remain booked out for the rest of their hosting careers. They can charge higher rates and make their investment money back in no time. Other times, finding long-term or short-term renters is a lot harder. The location has a lot to do with this. Big cities with housing shortages will lead to ADUs renting more quickly. Similarly, any location with tourist or pass-through appeal will attract short-term renters.

If your property is not in a desirable location, you can do little to change that. However, you could still market your property as a good jump-off point for something else. For example, when visiting Joshua Tree, it’s so expensive that some people stay in nearby towns, such as Twentynine Palms, Wonder Valley or Yucca.

The Purpose

There are many ways to generate income that might not follow the original plan you had in mind. For example, spending less money on one item can generate room in your budget from savings. Here are a few financial incentives for ADUs that you can consider:

  • Offering the space as a short-term rental for visitors
  • Renting the space to long-term tenants
  • Providing a space for senior relatives to age in place instead of at expensive nursing homes
  • Renting the space out to young adults who are returning home

At Design Appruv, we design homes that meet our clients' needs and the regulations that guide local developments. today.