Increasing square footage and forcing equity

[Chris Rebolini]

Good day Biggerpockets,

i am a newish investor who has been listening to the podcast since July. Looking to buy my first property sometime in 2024.  

i have experience as a property manager for my parents and have done some renovations such as adding a bathroom on the first floor of a slab on grade house. 

i have been educating myself to start becoming a RE investor. Getting all my ducks in a row and learning the fundamentals.

What really pushed me to post was a question I am having a hard time answering myself.

There are a few townships that I am interested in forcing equity and increasing SQFT via adding an ADU in an unfinished basement of a single family. But these townships have owner occupied rules surrounding the ADU.

I am thinking, live in this home for two years while I do all the work and eventually moving into the newly finished basement. 

The questions I have are :

Can I long hold a property like this and rent the entire house including the ADU as one unit?

 Can I rent this by the room as non owner occupied?

is an ADU worth it in for a situation like this?

Cheers, 

Chris Rebolini 

[Corby Goade]

You are definitely asking the right questions. This is very market specific- my city just changed to rules on ADUs- they used to not offer permits unless the main home was owner occupied, but now they'll hand them out like candy. 

They also say that if you don't live in the main home, you can't rent the ADU out as a separate unit, but they don't enforce that and have no way to track that information.

I'd meet with someone at the city planning desk and find out what they require, specifically. Then meet up with some local investors and see if, in reality, those rules are enforced in any way. You'll have an idea of the risk/reward balance there and you can make a decision. 

Best of luck!