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Serving the Los Angeles Area for Over 16 years

The ADU: Potentially Untapped Income From Home

For those of you who are unfamiliar with the term, an ADU is an abbreviation of the term Accessory Dwelling Unit. These are typically second (or third, as permitted in some areas) housing units on a residential property. So, what does this mean? Well … your garage, or your backyard could be a well of untapped income. Every city is going to have its own rules, and since we are located in Los Angeles County, we can only speak to what we see going on here. Always check with your local city housing department to see what the rules are where you live.

So, does that mean you have to live in the main house? Actually, many Angelinos are even renting out their main home and settling into the ADU for themselves. For those wading into the river of retirement, whose children are no longer in the home, or who just don’t need that much space (ADUs are typically between 400–1,200 sq. ft), living in the second or third unit suits their needs just fine. Plus, you get to enjoy the brand newness of it all.

A few things you’ll want to consider…

As always, your architect is worth their weight in gold.

A good architect can make a world of difference in maximizing the space, design, and flow of your space—especially important when keeping the square footage usable.

You can save money by converting your garage.

Those walls are worth big bucks! Conversions will always be less costly than a new build, as long as the garage is large enough (most two-car garages range between 300–400 sq. ft, enough for a small studio unit, kitchen and bathroom).

You can also build up.

Although the sky is not the limit: the limit is 25 feet. You can build on top of the existing home, or add the unit on top of the garage.

There are limits…

You cannot build the ADU in front of the main home. The ADU must be the lesser of 1,200 sq. ft or 50% of the main home’s square footage. Therefore, if the primary residence is over 2,400 sq. ft, you’re still capped at an ADU of 1,200 sq. ft or less. If your home is 2,399 sq. ft or less, you can only build an ADU that is 50% of the square footage or less. If your home is 1,800 sq. ft, you are capped at 900 sq. ft or less.

Where is the parking?

Well, a recent update to Los Angeles law is that there doesn’t need to be any parking specifically for an ADU as long as the unit is within a half mile from public transit. Still, offering parking is always a perk to a tenant who has their own vehicle. You will however, need to keep two reserved spaces for the main home though these do not need to be covered spaces.

Credit: ADU Guidebook:

Other uses for an ADU?

Guest home, home office, pool house, she-shed, game room, play room … I mean, how far does your imagination go? Secret lair? That too.

Can anyone build an ADU?

Most residential lots are approved, however there are some exclusions and requirements such as the lot has to have an existing home on it. Check your lot here:

Make sure you have the space…

A detached unit must be either 10′ away from the existing home and/or garage, or attached to it as well as 5′ from any and all property lines (unless you are converting an existing garage, in which case this requirement doesn’t apply.

So how much do they cost?

The cost of your ADU will vary greatly depending on the options you choose. Are you adding on or building a new structure from the ground up, or are you converting an existing building like a garage? Are you expanding the square footage, types of finishing, window sizes and styles, sewer attachments, flooring? There are so many options it’s hard to give a square footage cost.

What we can go by is historically: an ADU can cost you anywhere between $60K–$400K. That’s a big range! And that’s just an average. If you are on a hillside for instance, that cost could be much higher, as it would if you are adding a second floor. Cost clearly varies quite substantially, which is why we don’t suggest estimating by a square footage price. If you see an ADU go up in your neighborhood, talk to the owner if you can to get an idea of what it cost them. Contact a Contractor or an Architect (we will gladly connect you if you are local, otherwise is another great resource) and talk to them about what you are thinking. An Architect will be able to guide you and possibly give you new ideas as to what to design for your space and style. Working with a design-conscious Architect also ensures the design of your home blending or accentuating the style of the main home as well, making the ADU look less like an afterthought and creating a seamless flow.

For many in Los Angeles, adding another source of income certainly wouldn’t hurt. See if it’s feasible for you. Look up local rental units near you, crunch the numbers or speak to your bank or mortgage lender; they may be able to assist with funding and tell you what resources are available to you.

Please note, this is not an exhaustive list of all requirements. The best thing to do is work with a qualified Architect and Builder in your area. If you are in the Beverly Hills, Calabasas, Malibu, Tarzana, Studio City, Hollywood, or surrounding areas, contact Advanced Builders & Contractors and let us guide you through the process.

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