All Forum Posts by: Sajeev A.

I checked with the local county and they insist it'll be an ADU and will incur additional taxes. I'm not sure the investment justifies the cost at this point. Trying to see if I need to talk to a lawyer

Just to add context, this room would share a wall with the main house. 

I'm getting mixed messages on what's an ADU and wanted to clarify.

I've a room that is currently used as a media room and is connected to the home by a double door. I'm thinking of closing off that door and converting a window into an exterior door. After adding a small washer/dryer, sink, dishwasher, cabinets and a countertop, the plan is to give it out as a rental. Would that make it an ADU? In that case, seems like there are a lot of approvals required from the county and taxes to be paid. Before I embark on this expense and process, just wanted to get some insights on whether this is actually an ADU. Would I need to consult an attorney? I'm based in Portland OR.

Creating a new thread to clarify ADU

Ok, here's another question. By converting a room into a rental, doesn't that become an ADU? Has anyone in Portland OR gone through this process and any suggestions on the process?

A quick search on BP gave me this link: 

https://www.biggerpockets.com/blog/2009/11/23/real-estate-depreciation-a-deeper-look/ 

Yes Jeremy, I do plan to run the numbers by my accountant and will get the details on depreciation from her. Any quick overview on how depreciation would work though is appreciated.

Exactly. I think there's some restriction on cooking facilities, so that's something to find out more on. Other than that, it should be a self-contained unit. The rent is considered taxable income, right? I understand the utilities can be pro-rated by the size of the room. I didn't understand how depreciation works in this case. Can someone explain how this would work ?

Thanks. This was actually an in-law quarters earlier, so had its own plumbing. We integrated it into the house a few years ago to have the extra space. Now, we'll seal off the door and add washer/dryer behind it, so there's no direct shared wall. That's encouraging.

So, I was originally thinking of selling the home and downsizing to a smaller home. We have reasonable equity which could be used to pay down the next home. The issue was location. We're so used to this and anywhere else would take some adjustment(not impossible). The other option is to convert one room into a rental with its own side entrance, kitchenette, washer/dryer, full bath ad street parking. That way, the rent would subsidize our mortgage and we're effectively downsizing. As a bonus, we get to keep the existing home and continue paying down the principal. Anyone done this before? This is new for us and looking for advice for pros/cons on this approach. Thanks a bunch