Bay Area ADU Thoughts/Experiences/Advice

[Gary F.]

Hello, Awesome BPers. I'm new to investing and am thinking about building an ADU in my backyard. I'm in San Jose 95119 and from my research, I can build a 440SF ADU. Its a pretty small unit so I'm not sure it would be worth the trouble and costs vs ROI in rental income.

The best estimate thus far was about $125k total for the unit.  

What monthly rent would be reasonable?

What are some good companies out there to build?

If I sell soon after, can I expect to make a ROI or would I have to hold for awhile?

Thanks in advance

[Jason Hsiao]

@Gary F. a one bedroom or studio, depending on where in San Jose and the finish will go for about $1,500 - 2,000/mo. I hope that helps you assess the ROI. Most ADU's I've heard or seen is getting around 15% ROI. Your mileage may vary depending on your assumptions on expenses, capital reserves, etc.