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Updated over 3 years ago,

User Stats

15
Posts
9
Votes
Joy Elisse Garner
  • New to Real Estate
  • Grass Valley, CA
9
Votes |
15
Posts

Two ADUs or split up the parcel?

Joy Elisse Garner
  • New to Real Estate
  • Grass Valley, CA
Posted

Question for those of you with more experience than I, 

With all the new laws Governor Newsom passed in California recently to increase affordable housing, I am torn on what to do with our rental property! There are benefits to both options.

My fiancé and I own a duplex in Northern California with adequate lot space to develop  another two units by the side of our existing duplex. Lots of parking available but the property is exempt under the new law to add parking because we live next to a bus stop! So funny. 

Anyway, do I build two ADU's on the property and essentially make it a 4 plex property, get the cal grant of 25k towards development, save money on permitting fees since the units will be exempt from impact fees (8k each if they're under 750 square feet) have expedited permitting under the new law; and also save money on metering and utility set ups since they can tie into our main BUT be prohibited or ever separating our parcel and selling them on their own, (and we'd get about 1600 a month in rent off of each of them so we'd cashflow quite a bit)

OR split the parcel to build two separate units that can be sold immediately after they’re constructed, but then have lots of extraneous costs like impact fees, utility fees, and not have the expedited approval BUT make a lot more money on the sale if I were to sell it, but have much less cash flow than if I build ADUs instead.

Totally torn :( 



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