Why would building a companion unit or ADU in San Diego make sense?
Whether you’re considering building a companion unit for it’s rental potential or to help house additional family members. You’re adding on to your (most likely) biggest investment, your home. This in turn directly reflects and increases your homes value. So if you’re in most areas of San Diego where housing’s price per square foot is so high, it’s really a no brainer! You adding that 600 sq ft guest unit in the backyard dramatically increases your homes value. That is immediate equity you’re adding. Alot of our clients end up refinancing their homes after they complete their ADUs. This helps them get the money they invested out and usually only increases their mortgage payments by a couple hundred dollars! And than they are able to rent out that unit anywhere from $1,500 to $2,000+ per month in rental income. The equation is simple and makes sense.
Here’s a scenario…
John & Jenny own a lovely home in North Park, they have lived in the same home for the past 30 years. They decide that the stock market is a little risky but want to invest in something! So they decide to invest in their property and convert their detached car garage into a 500 sq ft companion unit to be used as a rental. John & Jenny invested 90K to construct their new living unit and are conservatively anticipating it will bring in $1,600 in monthly rent or $19,200 annually. Meaning John & Jenny will be making roughly a 21% return on their investment and in about 4.5 years they will have covered their initial investment of 90K . Not only that, by adding sq ft to their property, their new homes value has dramatically risen. Their is truly no other investment that can get you these types of returns. If you need help running down your own scenario, reach out to us at IL Total Design & Build. We live & breath accessory dwelling units!
