All Forum Posts by: Varinder Kumar

@Brandon Hall 

Thank! So i would be depreciating the unit and the home it self as separate deductions? 

How does this affect me if I am building an ADU in the back yard of my rental property?? thanks!

UPDATE: I am still in the process of proposing to the city what I want to build, which is a 300-350sqft studio with sleeping room, kitchen and bathroom. So far from what the planning division has told me the home itself is situated good. The unit can not be more than 30% of the primary home. And the unit plus the garage size and home size can not exceed more than 40% of the lot size, which in my case I’m good in that area also. The other factors they are gong to check are infrastructure, is it near shopping, food, etc. which I am also near. And there needs to be a dedicated spot for parking which I have also. As far as setbacks are concerned they are still checking but their assuming the usual 5ft from the side neighbors and rear setbacks their checking on. The city has not yet drafted out their own laws and regulations as the state will issue the law next month officially so based on what they’re put out the city will go accordingly to that. So a lot of gray area for now, maybe it can work to my advantage. Also here is a link to ADU discussion a while back. Calif’s new granny unit law & ADU flips: is CA the next Portland? on the BiggerPockets forums.

@Eric 

@Eric G.

Yes I have thought about both options. I will take the chance and test out AirBNB first to see how it works out for me, you miss 100% of shots you do not take right? but if AirBNB does not work out for me then sure I can use it as a long term rental. I will keep you posted on how things go. Thanks for the input!

Kyle H. That looks great! I would love to see interior pictures to get an idea of the layout. From what I have came across they got for anywhere between 70-110sqft. I guess I will just have to have people come out and give me quotes based on blue prints. Of course what they quote and what I actually spend are two different things, usually ends up being more. Never the less it’s still more profitable than buying another SFR. How is the cap ex for you on your units? A lot of upkeep and management?? Are the profits worth the short term rental vs long term tenant? Thanks!

Joseph Pond yes this has been my plan since I purchased the property. I have done the numbers I’m looking anywhere between 40-65K. Honestly I can probably get it done for $40K, not including furnishings. So the plan is to do a HELOC with a expected ROI in 3-4 years. In the mean time my cash flow will pay for the increase in my mortgage due to the HELOC. If I can occupy 20 days out of the month that’s 2k not excluding cap ex. Besides $99 a night is a start and I might up it to $150 as some time goes on. Thanks to the location I should not have any problem occupying the place. So on the conservative side of things if it goes 10 days out of the month that’s $12k a year, $36k in 3 years- so 3-4 year ROI conservatively and even quicker ROI with a 20 day occupancy. Hope this sheds some light. Feel free to ask away with anything else.

So my current rental is doing great. I am looking to building a 300-400sqft additional dwelling unit in the backyard. I called the city already in regards to this an waiting for them to call me back. We are going to discuss what their laws and regulations are as far as setbacks and zoning. I would like to know from my fellow BP'rs their insight on this project. Has anyone done this before? I am looking to Air BnB the unit. For the unit itself with will be something along the lines of:

Sleeps 4, one queen bed and another sofa bed, small kitchen and bathroom. 

My backyard is pretty big, I want to divide the yard in half and build the unit on one side where it already has its own entrance to the side of the home. As far as my current tenants are concerned. I am yet to speak with them about it- any advice on this also would be great! I won't raise their rent and have not raised their rent in the 2 years they have been there.

And I plan on marketing the unit for $99 a night, the home is close to theme parks, malls, gyms, shopping and restaurants. 

I look forward to the replies on here, thanks! in advance.

If you can buy something with equal rent for $115k cash I would 1031 and buy something else cash. I am an advocate for free and clear rentals. Less headache and reduces your vacancy percentage reserve every month.

Jared Bouzek I am following this discussion. Also looking for the same.

north of 50% ROI.