Stay and add ADU, or move and house hack?

[Jennifer Smith]

I’m at a decision point with my current home, and I’m trying to figure out what the best decision will be to set myself up for long-term success.

I would love to hear any ideas the community might have!

The situation: I have 255k left on my 301k home, which is probably worth 360k now.

I rent the basement out for 800/month, and my house payment after that is about 1080/month.

I have two choices.

Choice A: Get a HELOC and put an ADU in the backyard for 80k, then refinance on a 30-year fixed. I can then rent out the ADU and the basement while I live here for another few years, building equity for a down payment to move. With the ADU, when I move and rent the upstairs, the property will cash flow about 500/month. The drawback: I really don't like my neighborhood, and would like very much to move.

Choice B: Sell the house and move to another neighborhood that I like more, with a basement that I can rent out. The long-term plan will be similar to my current home - to put an ADU out back as soon as I can, and rent the basement.

I know that you can’t say without knowing the exact numbers which is a better deal. My question, though, is this: To you, is the financial gain from staying and creating a cash-flowing situation out of my property worth staying in a neighborhood I don’t really like for 3ish more years? Would you sell and move, or stay and build?