House hack while married? duplexes hard to find in bay area.

[Jacob Scholes]

My Wife and I are looking for a home to House Hack, but with a limited supply of Multi Unit Properties in the Area we have been mainly looking at Single Family homes.

One idea we've had is to convert a Garage into a second unit, my question in this regard is will it decrease the value of the home in the eyes of potential renters if there is no Garage?

If my math is right you could almost double a properties income potential by adding an Accessory dwelling unit which will probably cost less than 10-20% of the initial home purchase price.

Example:

SFH purchase: $400,000 renting at around $2,100-2,500 (after about $5,000 updating)

Garage Conversion: 25,000-100,000 (maybe less if I can find one with a bathroom next to the garage)

1 bedroom renting near Fairfield CA: $1500 month

A lot of these numbers are idealized but this could bring the Property near to the 1% rule.

400,000+25,000+5,000 = 430,000

(2500+1500)/430,000 = .93%

Now if we get this to work and we take it a step further and add a second ADU to the backyard for 100,000-200,000 we could add a 2 bedroom and add more income

total cost: 430,000 + 150,000 = 580,000

rent for 2 bedroom: 2,000

Total income: 6,000

6,000 / 580,000 = 1.03 %

Do these number look relatively reasonable to anyone that has more experience with adding adu's in California?

I am basing the rents on some properties I have analyzed in Fairfield, although the one that originally based it on was put under contract by another buyer before I could get my offer in.

I know some may say you can't just add units, but with the passing of SB-13 and a few new laws in California for 2020 this is now possible.

Am I overlooking something?

Thanks for any input that you provide!

Feel free to add constructive criticism or offer alternative solutions.

Thanks!