Maximize Your Property Potential With An ADU
ARM Builders - Constructing Your Accessory Dwelling Unit in Los Angeles
Maximize Your Property Potential With An ADU
ARM Builders - Constructing Your Accessory Dwelling Unit in Los Angeles
What is an ADU?
An Accessory Dwelling Unit (ADU) is an opportunity for building owners and prospective tenants. The ADU is a living space of up to 1200 sq.ft. that is an accessory to a single-family or a multi-family building. It will increase the valuation of your property when you build an ADU, and the City of Los Angeles can even find you a tenant and guarantee rent for five years. This is the ultimate win-win for any Los Angeles homeowner.
Why build an ADU in Los Angeles?
The clock is ticking on the ADU opportunity. Over time there can be an increase in the cost of materials, not to mention a slowdown in the city of Los Angeles administration process. You can use it for short-term rentals like AirBnB, regular long-term rentals. If you wish, there are also programs from the city that will ensure you get a guaranteed tenant. Los Angeles is currently offering subsidies and financing is available to cover 80-90% of the cost of construction.
Multi-Family ADU
In January 2020 a new law came into effect allowing multi-family units to add additional units to their buildings through the ADU program. This is groundbreaking! The following can become legal units:
- Garages/covered parking spaces
- Non-conforming units
- Recreation rooms
- Laundry rooms
Junior ADUs
Acronyms can get confusing. A Junior ADU, JADU, or Junior Accessory Dwelling Unit, can be up to 500 sq.ft. and contained inside a single-family residence. The main restriction for a JADU is that the residence should be occupied by the owner. Nevertheless it is still a handy way to generate more passive income if you do not have the ability to build your own ADU. Our commercial projects include both new construction and repairs or restorations. Occupied and fully operational job sites are never a problem. We can also plan, manage, and build multi-phase jobs.
LA City Legislation
The City’s Accessory Dwelling Unit Ordinance (Ord. 186,481) was passed on December 19, 2019. It added Los Angeles Municipal Code (LAMC) Section 12.22A.33, which included standards and requirements for ADUs, Junior Accessory Dwelling Units (JADUs), and Movable Tiny Houses (MTHs).
The Easy Way To Find Tenants And Get Rent Paid
There is an incredible opportunity for homeowners who are building an ADU. The City of Los Angeles is keen to provide more affordable housing for Angelenos, and the LA ADU Accelerator Program connects older adults with householders who are interested and prepared to provide rental housing in their ADU. This great opportunity means that the city will refer qualified tenants, ensure you receive stable rent payments. Click here for more information about the Los Angeles ADU Accelerator Program: https://adu.lacity.org.
How Much Rent Do Homeowners Receive?
Homeowners receive the following monthly rental payments for their units:
- Studio ADU — $1,869
- One-bedroom ADU — $2,165
- Two-bedroom ADU — $2,663
- Three-bedroom ADU — $3,135
Make Your Money Back
The Gross Rental Multiplier (GRM) is a term used in real estate to reflect how many months of rent you will need to cover the cost of your building. By renting your ADU you will cover your construction expenses in 4 to 5 years or less. After that it will become all profit for you. These numbers are for long-term rentals, but if you do a short-term rental then you could halve the repayment time. If you rent through AirBnB, you could pay it off even faster!
