Strategy for Analyzing an ADU

[Christian Cambridge]

Greetings all,

I'm considering a home renovation loan to convert my garage into an Accessory Dwelling Unit (ADU). The loan will change my current interest rate, so I want to make sure that the return is worth doing the renovation loan. Is there a Bigger Pockets or other tool (i.e. Rental Property Calculator, Mortgage Calculator, etc.) available for running the numbers for an ADU done through a Home Renovation Loan?

[Christian Cambridge]

Quote from @John Clarken:

Quote from @Christian Cambridge:

Greetings all,

I'm considering a home renovation loan to convert my garage into an Accessory Dwelling Unit (ADU). The loan will change my current interest rate, so I want to make sure that the return is worth doing the renovation loan. Is there a Bigger Pockets or other tool (i.e. Rental Property Calculator, Mortgage Calculator, etc.) available for running the numbers for an ADU done through a Home Renovation Loan?

Hi Christian, I've heard of a few appraisers not increasing the value of the property equal to the cost of the ADU - being less which could be a problem if you are trying to value add and pull cash out. The ADU is great idea for cash flow and you can find comparable by looking what is on the market. What is your strategy for this ADU? I think ultimately when you want to sell the property the right buyer will pay extra for the ADU either for in laws, rental purposes, or some type of guest house. 

Hi John, I'm planning to move my mom/grandma into the primary and move into the ADU once completed as I don't need much space. Not sure how much this will increase my mortgage which is why I'll need to run numbers ahead of time. I don't see myself selling the home anytime soon, but want to make sure I have enough to put down on another home once I start at family.