Brian Johnson: Interested in Investing in Real Estate? Start With an ADU | Business
Have you considered buying real estate as an investment? Have you looked at the steadily rising property prices lately and thought it was a mystery to you?
There could be a simple solution right in front of you, or better yet, right under your feet.
If you own a home, the option is to add a residential unit (ADU) to your property and rent it out for income from capital.
An ADU is another residence on the same property as the main house. It can be an existing part of the house, attached to it, or a separate structure. In the past, ADUs were often referred to as grandma units and mother-in-law units.
The State of California has made it easier for homeowners to add an ADU to their property to help fight the real estate crisis we are currently facing.
Previously, laws at the local level did more to ban ADUs. Now the state is making it more difficult for the municipalities to refuse them if they meet the statutory design standards. That has led to an explosion of ADU permits across the state.
Permits are granted faster and easier and homeowners can complete a new residential unit in less time. That saves money and makes construction cheaper. There are still size and design guidelines that homeowners must adhere to, but it allows more people to build them.
With an average price for a home in Santa Barbara well over $ 1 million, it makes sense for homeowners to add an ADU if possible. This allows for a more affordable entry into the world of real estate investing, as many more people can afford a $ 100,000 ADU than a $ 1 million investment property.
It’s also much easier to lead a unit at the beginning.
In addition, by adding an ADU, you increase the value of the property as a whole. When you sell your property, you will easily recoup that original investment.
Brian Johnson is the new President of the Santa Barbara Association of Realtors. He is a California licensed real estate agent and the managing director of Radius Commercial Real Estate. Brian handles all types of commercial real estate transactions but has a particular focus on multi-family investments. He can be reached at 805.879.9631 or [email protected]
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