ADU Rental Market Insights and Cost to Build Los Angeles

[Michael Adamo]

Hi BP Community,

I’m exploring adding one or two ADUs to a property I own in the Miracle Mile area, near 3rd Street and La Brea in Los Angeles. My goal is to understand the current demand and rental potential for ADUs in this part of the city, as well as the costs involved in building. I'm particularly interested in any insights or recent experiences with the following:

1. Rental Demand and Rates: What is the current rental demand for ADUs in this neighborhood? Are 1-bedroom units more popular than studios or 2-bedrooms? Any insights on rental rates for ADUs would be helpful.

2. Actual Cost to Build: For those who have built ADUs in LA, what were the actual costs you encountered? Do you recommend using a general contractor, or would it be more cost-effective to handle it myself with subcontractors?

3. Occupancy and Market Trends: How is the ADU market trending in Miracle Mile and nearby areas? With the new subway line being built nearby, do you think this could boost demand for smaller, ADU-style units?

4. Advice on Layout/Design: For those who have added ADUs, do you recommend standalone units, garage conversions, or a combination of both? My property has a rear detached garage with alley access, so I’m exploring options there.

5. General Tips for ADU Investments in LA: Any advice on maximizing ROI from ADUs or common pitfalls to avoid when building and managing ADUs in LA?

Thanks in advance for any insights you can share. I’m excited to learn from others who have experience in the LA rental market, particularly in this neighborhood.