I’d like to hear from others on whether or not this makes financial sense.Current PropertyCurrent Mortgage Balance: $334,000Home Value: $500,000Equity: $166,000ADU + Project OverviewTotal Estimated Cost: $200,000Two car garage with work shop (property does not have garage today)576 sqft of livable space in ADU above1 bedroom, 1 bathroom, kitchen, living room, & laundryADU has private entrance outside of garageADU has 140 sqft patio with mountain views     Additional Projects to be Included for Main Property Landscaping my current yard (no improvements to date)Adding oversized deck/patio that extends living room outsideIncludes all infrastructure, sewer taps, designs, permitting, etc.

Great news my cabin is 5 miles from the entrance would love to see it expand even more and hopefully expand their season.

Camera at the front and back entrance, fully disclosed in your ad.

Purchase price: $455,000 Cash invested: $7,000 House Hacking / Live in Flip / Owner Occupied / * In- Progress *Asking Price: 459,999Main House Rehab: $5000VA Loan 0% Down* SELLER PAID CLOSING COSTS AND $15K IN REPAIRS, NO MONEY OUT OF POCKET TO SECURE PROPERTY ** RENT BY THE ROOM STRATEGY: Currently live in 1 of the 5 bedrooms in the main house (converted dining room and portion of the living room into 2 8x10 bedrooms for additional cash flow) *PITI: $3060Rent Total: $3500 ($875 per room, includes utilities, Wi-Fi, and Security System)* Current Project: 300 SQFT ADU *ADU Rent Estimate: $1800 (Includes Utilities, Wi-Fi, Security System, and private entrance, yard, and parking)Construction Budget: $20k (Structure is already existing, more of a conversion)Will Post Finish Pictures/ Videos When Finished with renovation and ADU Conversion.

This was a perfect set up as it had a side entrance into a finished basement with 2 bedrooms, bathroom, and full kitchen.

I would consider the garage to be basically a ground up build (it already has a dedicated yard and private entrance.) and the house I have taken care of, but would need a little work to accomplish my goals. 

All construction will be done at the same time. 6) there are other entrances to the land and it will not cut any of it off. 7) thank you for this suggestion.

This was a perfect set up as it had a side entrance into a finished basement with 2 bedrooms, bathroom, and full kitchen.

This one needed some work such as putting in a 2nd kitchen downstairs, and walling off a side entrance, but it turned out great!

Hard to answer.If the rental space was physically part of the living area of your home, such as a spare room used rental room, the rental usage doesn’t affect your gain/loss calculations and will qualify for the full exclusion given the seller meets all other requirements If the rental space wasn’t within your living space, such a duplex with its own entrance (and kitchen and bath), or a working farm with a farmhouse on the property, then you have to take into consideration of the business use and you need to make separate gain/loss calculations for the business and residence portions of your property.