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Updated almost 6 years ago,
How much value would an additional unit add to a property?
1,508 square foot 3 bedroom, 2 bathroom single family home on an 8,400 square foot lot in Sunland, CA, in need of $5,900 in minor cosmetic work.
There is a 400 square foot detached garage in the back that can be converted into a 500 square foot additional unit equipped with a kitchen, bathroom, bedroom, and living space after rehab. The detached unit can be rented out for between $1,500 - $1,800 when fixed up.
Asking price is $599,900. The ARV of this home according to the comps would be $626,750 WITHOUT accounting for the additional unit. With counting in a ready to rent, 500 square foot additional unit than can be rented for $1,500+ /mo, how much value would this add to the property for the ARV when flipped?