Adding an ADU to an existing rental property

[Jody Powell]

My wife and I own a rental property that currently has about $200k equity. We are considering pulling equity (HELOC) and adding an accessory dwelling unit in the back yard. Our reasons for going this route include that prices in our area are really high. The rental market is strong because of a housing shortage and the neighborhood has seen a boom of ADU's since the city allowed any SFR zoned property to have them. This added with a new 4 year university just a mile away all seem to suggest that our property id bring under utilized. Having no experience in HELOC's nor building, I was hoping BP might have some suggestions for things to look out for in both areas. We are meeting with a credit union today to discuss credit. I also have a meeting with a fellow BP user who is a contractor set for next week.