Soon You Can Own a ‘Duplex/Triplex’ In LA – Build an ADU On Your Single-Family Lot
In previous posts, I’ve mentioned the recent California ADU (accessory dwelling unit) laws that make it easier to build an ADU or convert your garage into an ADU. In essence, they allow almost any homeowner in Los Angeles and the entire state of California to build an accessory dwelling unit (granny flat) with only limited restrictions.
Here at GreatBuildz, a free service that connects homeowners with reliable general contractors, we get a lot of inquiries about the new 2021 ADU guidelines and how they affect Los Angeles homeowners.
In the past, homeowners that wanted to build a duplex were greatly limited by the old ADU guidelines, rules, and restrictions. People would have to provide covered parking if they wanted to create a true ADU with a full kitchen, and that was very difficult or onerous. Alternatively, they could create a unit with only a ‘kitchenette’ and were limited in their ability to rent that unit. Most people would convert a garage into a guest house or office for their own use, without the ability to use it as a rental, limiting its value as an investment.
Fast forward to today and the landscape has drastically changed. With California seeking to resolve its major housing crisis, it has drastically loosened ADU restrictions in hopes that the construction of ADUs will go a long way in increasing the housing stock. Allowing people to do a garage conversion into a true accessory dwelling unit makes a ton of sense, creating what is essentially a duplex on a single-family property.
Many LA homes have a detached garage behind their house which is already the right size for a duplex-style ADU for a studio or one-bedroom (300-500sf) unit. In addition, the structure already exists, so there are great efficiencies in cost and time to convert it to a living space, versus building from scratch.
Even if someone chooses to build an ADU or “guest house” from scratch (rather than a garage conversion), there are tremendous advantages as they already own the lot (no cost of land) and there are adjacent utilities available (electrical, plumbing, gas, etc) at their main residence.
Value of Building an ADU as an investment
If you own a home and are interested in obtaining some rental income, building an ADU into a ‘duplex’ in Los Angeles is a great investment. There are obviously the up-front costs of construction, but you get much more in return.
- First, you get a steady stream of rental income from renting the unit.
- Also, you have permanently increased the value of your property, so you can now sell it for more.
- Lastly, you now have more space for any of your own needs, even if you don’t rent it (office vs. guesthouse vs. playroom vs. fitness studiov vs. music studio vs. granny flat, etc).
An ADU as a rental is a great scenario for both the landlord and the tenant. For the tenant, they get a stand-alone home with no adjoining walls/floors, rather than an apartment with many neighbors. This is ideal for a single person, a couple, roommates, empty nesters, retirees, or even a young family. For the landlord, the rental income can be substantial return in today’s ‘high-rent’ environment and goes a long way towards contributing to their mortgage and other costs.
Potential Duplex ADU Rental Income
Depending on the location, a small ADU can earn $1,500-$2,200 in monthly rent while a large 2+ bedroom ADU can get $2,500-$3,000 in rent. Remember, your ADU is practically ‘new’ as you’ll just have finished building it, so it will be appealing to potential renters. Utilities are negotiable and can be charged in addition to the rent or can be separately metered.
With current California ADU legislation, you can essentially turn your single-family property into a ‘duplex’. Check out my other blogs for more details about accessory dwelling units and garage conversions.
And there is more good news.
Junior Accessory Dwelling Units – What is a JADU?
The new California ADU legislation for 2020, which went into effect January 1, 2020, will also allow homeowners to build a Junior ADU (JADU) on their property in addition to the main house and an ADU. The Junior ADU is limited to 500sf, but that’s plenty of space for a studio or 1-bedroom unit. A junior ADU does come with occupancy restrictions which you can find on my JADU blog.
The JADU guidelines state that this unit must be within the existing ‘envelope’ of the main home (with an ability to add an additional 150 square feet for ingress/egress). Let’s translate that and give a few options…
If you have an attached garage, it is considered within the envelope of the existing home, so you could convert that into a JADU (maximum 500sf). Or if you have an extra bedroom you’re not using, you could ‘wall it off’ to separate it from the rest of the house and add a small kitchenette to create a JADU.
Check out my other blogs about building a ADU on your property to create a good return on your investment and build long-term value.
- Must have a separate entrance from the main house, so you’ll want to install an entry door to the JADU, likely at the side of your home.
- Can have its own bathroom or could share a bathroom with the main residence.
- Must have an efficient kitchen, including: a kitchen sink with a maximum size of 16”x 16”, no gas-powered appliances, and, if using electric, appliances that require less than 120 volts of power.
- No parking is required for the JADU unless you convert an attached garage (for which you’d have to replace said parking)
- The JADU comes with an occupancy restriction. This means that you, the owner of the property, must either reside in the main home or in the JADU…and cannot rent out both areas. (This restriction pertains to a JADU only, NOT an ADU).
Junior ADU in Los Angeles | Credit: Yard Pods
Now your single-family property can become a ‘duplex’ or ‘triplex’ investment property! You’ll have your main home, a 1200sf max ADU and a 500sf max junior ADU. You’ll be able to rent two of the three units, so the rental cash flow returns should be significant. In other words, depending on location and size, you could conceivably get $4,500 or more in rent for your two units and still live on the property ($2,500 for a large ADU and $2,000 for junior ADU). Not a bad value!
When it comes to building a Duplex, ADU, garage conversion, or JADU at your property, the process isn’t too complex if you know the right steps to take. You’ll get a lot of value just by doing some upfront research.
The first step is to get some free advice from a knowledgeable source to make sure you can accomplish what you envision on your property. Our staff is always available for a free 15-minute call to help with this.
Next, you’ll want to hire a designer or small architect to draft your plans so they can be submitted to the City Department of Building and Safety for plancheck review. This should cost you approximately $4,000-12,000 depending on your needs.
Lastly, you’ll want to start meeting a few local General Contractors to ensure your vision matches a realistic budget for the project. Some contractors even have in-house design capabilities, so you won’t need to hire an outside architect. You can learn more about selecting the right contractor for your ADU or JADU project be reading my other blog (“How To Find An ADU Contractor”). You can also check out our ADU construction checklist to stay organized and make sure your project includes all the items necessary.
If you want to learn more about the process and costs of building an ADU or garage conversion on your property, please check out my other blog posts below. When you’re ready to take the next step and talk to a contractor or designer/architect about your specific ADU project, please feel free to call one of our friendly Greatbuildz staff at 818-317-3567 or at www.Greatbuildz.com.