Investment Property with an ADU

[Lance Turner]

I'm considering purchasing an invesnment property with a small ADU (1/1) in Georgia. I've never owned an ADU and I'm concerned about how it'll influence the primary which I also plan to list and rent. It has separately metered electric service. Can anyone share experiences renting out a primary and an ADU. The area is not a dense urban area.

[Jackson Ebersole]

Hi Lance,

Based on your query and the information provided, here's some guidance on renting out a primary residence and an ADU in Georgia:

Legality and Zoning: ADUs are legal in many parts of Georgia, but regulations vary by location. Check your specific area's zoning laws. For example, in Atlanta, ADUs are allowed in R-5, R-4, and R-4A-zoned lots.

In Atlanta, you can rent out both the primary residence and the ADU to separate parties. Some municipalities like Dekalb County and Decatur require the homeowner to live on the property.

ADUs should be at most 40% of the main residence's floor space, with a maximum size of 800 square feet in some areas. If detached, the ADU must typically be placed in the backyard and occupy at most 30% of the backyard's footprint.

Having separately metered electric service is advantageous for managing costs and billing tenants.

Adding an ADU can potentially increase your property value. ADUs can provide additional rental income, which can help offset mortgage payments or other expenses.

Extend your homeowner's insurance to cover the ADU.

Be prepared for potential increases in property taxes due to the added living space.

Given that your property is not in a dense urban area, make sure to check specific local regulations as they may differ from city regulations. The separate metering for electricity is a plus for managing utilities. Consider the potential for increased property value and rental income against the additional management responsibilities and possible tax implications.

Remember to consult with local authorities and possibly a real estate attorney to ensure full compliance with all regulations in your specific area.

Let me know if you need funding for the rehab.

Regards,

Jackson