The ADU Revolution

1. What is an ADU?

• An ADU is a smaller dwelling unit constructed on the same property as the main house.

• It can be attached (sharing a wall with the primary residence) or detached (standing separately on the same lot).

• ADUs typically include basic amenities like a kitchen, bathroom, water, and electricity.

• They serve various purposes, from housing aging parents to providing rental income.

1. Pros of Investing in ADUs:

• Addressing Housing Shortages: ADUs contribute to affordable housing by creating more options for renters and homeowners.

• Rental Income: ADUs can be rented out long-term or as short-term rentals (e.g., on Airbnb or VRBO).

• Low Barrier to Entry: If you own your primary residence, ADUs offer an accessible entry point into real estate investing.

• Versatility: ADUs can be converted from existing spaces (like basements or garages) or built from scratch, serving various purposes (guest suites, gyms, offices, etc.).

1. Cons of Investing in ADUs:

• Regulations: Local zoning laws and building codes may restrict ADU construction.

• Costs: While ADUs are generally cost-effective, initial construction expenses can vary.

• Management: Managing tenants and maintenance requires effort.

• Market Demand: Assess the demand for ADUs in your area before investing.