That said, through conversations with brokers in the area (and evidenced in the comps I’ve created) I’ve learned that this strategy may be slightly outdated as most properties are currently at market rents given the current rental environment, expenses aren’t a realistic lever to rely on to add value, and there is a real risk I get priced out of the market by buyers with cash, 1031 exchanges, and with longer term hold strategies willing to pay an extra $10-20k per key.

The conversation I'm not hearing when we're talking about ADUs is that Jr. 

Although we won't see any drastic changes immediately, it's clear that the conversation is moving forward and could lead to significant shifts in how we do business.

Unpermitted bedroom conversions would increase your potential liability and may hinder the resale in some ways.

Knock on the door, have a friendly (but strong) conversation about the eviction process and then offer cash for keys.

The Pro-Rata Rule is used to determine the ratio that should be applied in determining how much of the conversion is pre-tax vs after tax.

After lots of dinner conversations, I can promise you, buying real estate is much less stress than your day to day. 

Hi there,In the process of searching for our first rental property and saw a couple prospective properties yesterday.Thoughts on making a currently single family rental into student housing..Current tenants-month to m...

But it is the tax return that will show the conversion of your property from personal use (schedule A probably) and into an investment property - (schedule E or schedule C of your tax return).

It is basically how I laddered to 20 properties.I'd be happy to have a conversation with you about this.