All Forum Posts by: Harry Carter

The last sentence above is spot on. In most markets, the property's increase in value (both appraised and actual market) will fall well short of the costs associated with adding an ADU. So this would be purely a move focused on increasing your monthly rental income, but would temporarily set you back from an equity perspective. However, this isn't the case for all markets. I would research how things play out in your area. In some markets, ADU's actually do add value at a premium to what they cost.

I was personally willing to eat the negative equity associated with adding an ADU to my So Cal home, but the thing that stopped me was the prospect of having a tenant live on the same property. It just wasn't for me.

As someone with an ADU (I lived in it for two years and now rent it out):

1. Does converting a garage add value to the home?

Typically it does, especially if it is permitted. Look for sales of properties with ADUs and that will give you your answer. There is a market for either multigenerational living, house hacking, or luxury living (someone who wants to brag they have a guest house). With that said, it depends on your market. We sold a luxury home where the garage was converted to a studio and buyers wanted it converted back to a garage. Their thought was "if I'm paying $4M for a house, I want a garage." Also keep in mind that appraisers haven't been giving dollar for dollar value (at least in my Los Angeles market). 

2. Should I have an architect design it?

That is a building and safety question. Likely you will need architectural and engineering plans. Remember, the original garage was not designed to have people living in there.

3. Any reasons why I should/shouldn't do it?

It isn't really if you should or shouldn't do it, it's more of is it well thought out. How's the parking situation there (especially if it snows)? What would you do for privacy? Are you adding laundry? Will there be private outdoor space? How much will you get for rent and what is the payback period? Things like that can make a difference.

First thing you need to do is check with your city. A LOT of times, the garage will not meet code to be used as 'Living Space'... Starting with the slab, it does not usually have a vapor barrier or the correct PSI concrete.

Hi Biggerpockets community!!! I have a question. I got a vacant apartment , and I recently found a handyman, that does work here and there. He is interested in renting it, and moving in with his mother and fiancée, however , the apartment needs work, like painting and throwing the old tenants furniture and trash out. I was wondering how do I structure the lease, should I give him a month free rent, with condition of emptying the trash, and cleaning the apartment ? or perhaps do the painting and trash throwing myself, and charging him deposit and rent? I have to disclose the properties are 3 hours away from me in Binghamton NY. It’s been difficult finding workers. So far I put him to the test and he seems solid. The contractor family lives in the neighborhood, they sort of patrol and see what’s going on..