Los Angeles ADU valuations explained

[Jonathan Taylor]

Good Afternoon Local LA BP folks,

I know this has been a hot topic among the local LA investors and as a mortgage broker I was very curious on how ADUs are actually valued as I keep hearing different sides to this. I spent a good amount of hours talking to local LA residential appraisers to get an idea. Bottom line is, ADUs are NOT valued the same as an additional unit nor is the rental income considered in their valuations. The best example I found was if you have an SFR with a pool and an SFR without a pool. The SFR with a pool is given maybe 20k-30k more in value. Same concept for ADUs. Its a value add line item and assigned values ranging from 20-50k. Now the appraisers I spoke to did not speak in absolutes as they would constantly say 'probably around' and 'depends on the comps of recently sold in the area' to justify the property values assigned to ADUs.

Let me know your thoughts but this seems to stick as I spoke to 5 local LA  residential appraisers, all consistently reiterating the above comments. To be clear, this is info about Los Angeles county ADUs only, I did not speak to any appraiser outside of this county.