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.
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.).
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.
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