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Old 06-26-2017, 05:20 PM
 
35 posts, read 11,558 times
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Aloha,

A property we purchased has a Mother in law One bedroom apartment on the first floor that we would like to rent out long term. We can apply for an ADU and put in a traditional stove, or forgo the process and expense and put in a very large new toaster oven and nice, new, 4 pot hot plate.

We should pass clearance for the ADU. We just don't know if its worth it.

My question to potential Leasee's or Leasors is, is there any value difference in the rent between a kitchen with a tradition stove or the other set up, if so, about how much?

My second question is, how difficult is "the walk" to get clearnance sign off from all of the departments to apply for an ADU Permit and about how long does it take and any advise on helping it to go smoothly if we go that route?

Is it truly another 6-8 weeks to get the permit once applied for and does it have to be renewed ever or is it a one time thing?

For any Realtors or Appraisers, my questions is, how much value can having the ADU permit add to the property?

I am aware of an article that came out last January that said the county wants to increase densitity by approving more new construction with ADU rentals within homes to deal with the housing crisis before approving new home single family home development sites. This is the set up they say they want more home owners doing with their single family homes, making them multi family ADU approve with intent to rent.

Any advise, answers, suggestions will be greatly appreciated.

Many Mahalos!
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Old 06-26-2017, 06:00 PM
 
Location: Moku Nui, Hawaii
8,857 posts, read 16,502,969 times
Reputation: 7247
If I were a renter, I'd much prefer the ability to prepare meals at home. Now how that happens can be different, it may not require a traditional kitchen. But at least some sort of refrigeration, a sink, and a few heating device(s) would be my minimum requirements. If you were to have some basic kitchen small appliances, they could possibly fill in for the lack of a standard stove, that might work. A regular toaster, toaster oven, microwave, maybe a propane grill out back, a coffee maker, hot plate, hot water kettle, crock pot, etc. It all depends on your renters, though. I think you'd get more for a standard kitchen, but I don't know how much more.

Clean, cute and in a good location could make up for a substandard kitchen.
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Old 06-26-2017, 06:35 PM
 
35 posts, read 11,558 times
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It has a full stainless steel fridge, stainless steel dishwasher, microwave, garbage disposal, RO water system, cabinets, fully furnished with all serving and cookware, etc. The apartment otherwise at large is furnished to the side of higher end Tommy Bahama/British Colnial style and we would prefer to finish out the kitchen right with a traditional stainless steel gas range. To do that and keep it all leghal, we would need the ADU permit. It's super clean with a gorgeous rim lot view and quick to kapaa and Lihue, private washer and driver in unit, off street parking, private patio, all utlities included, the works. Thats the one sore thumb with us right now and want to know what we are looking at moving ahead with the ADU permitting process and want to feel more confident that it will be worth it is all.

I appreciate your feed back. Mahalo!!!
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Old 06-26-2017, 08:59 PM
 
Location: Kailua
8,376 posts, read 10,293,218 times
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Have you thought about asking an actual realtor on Kauai?

With that said, my opinion is anything legal is worth more than illegal. How much to conert to legal ADU?
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Old 06-26-2017, 09:28 PM
 
Location: Moku Nui, Hawaii
8,857 posts, read 16,502,969 times
Reputation: 7247
A lot of people like stainless steel, although I just see them as fingerprint magnets. Fortunately for your future renting possibilities, I'd suspect my choice of kitchen appliances is not mainstream.

How's the housing on Kauai? Tight like on the other islands? When we listed a house to rent we ended up with a deluge of applicants. They had to write an essay on why they wanted to rent the house. That sorted two thirds of them out of the pile right away.
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Old 06-26-2017, 09:36 PM
 
1,317 posts, read 1,211,702 times
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Quote:
Originally Posted by Whalesongs View Post
Aloha,

A property we purchased has a Mother in law One bedroom apartment on the first floor that we would like to rent out long term. We can apply for an ADU and put in a traditional stove, or forgo the process and expense and put in a very large new toaster oven and nice, new, 4 pot hot plate.

We should pass clearance for the ADU. We just don't know if its worth it.

My question to potential Leasee's or Leasors is, is there any value difference in the rent between a kitchen with a tradition stove or the other set up, if so, about how much?
From a rental standpoint (assuming it's for one or two-person occupancy only), I would say the rent difference would be zero. While all my rentals have full size ranges, I have a good number of tenants that NEVER use the oven part of the range. Lived there for 5 years... open the oven and clean as a whistle with the instruction manual still in it - no joke. Most of my rentals are smaller though... meant for single or double-occupancy. Nowadays (thank you, technology), you can get fancy counter top ovens that bake, broil, etc much faster and more efficiently than standard ranges... and the food comes out much better with far less clean up. You can also buy induction hot plates (single or double) that cook food much faster and efficiently... and then you just throw them into the drawer right after cooking (they cool down instantly). So when you're not cooking, you have much more counter top space in your kitchen. This is particularly nice in smaller kitchens where counter top space (and cabinet storage space) is at a premium.

Unless your tenants are hardcore chefs or like to cook meals for groups of people, there is zero value (to at least some tenants) to having a full sized range in your rental. Personally, I think it's silly that tiny studios and one bedrooms here come with the exact same cooking appliance as 3,000 SF 5-bdrm homes. It's as if they got everything to scale in the home... BUT the cooking appliance. The only reason they likely still exist is because banks require them to underwrite their loan products. Otherwise the space available in the tiny kitchens could be much better utilized with a smaller counter top integrated two-burner cooktop and a microwave (with vent) that also doubles as a full-functioning oven.

However, from a resale standpoint, having the ADU legally permitted would definitely add value. If you don't have comps in the area that additional value is anyone's guess... but I'm sure anyone would agree it would sell for a chunk more than a SFH without a legal ADU.

Did you check to see if the property allows for legal Ohana units? These generally don't have any size restrictions (but must be attached)... and if sold, will sell for far more than a home with an ADU on it.

Last edited by pj737; 06-26-2017 at 10:03 PM..
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Old 06-26-2017, 10:06 PM
 
35 posts, read 11,558 times
Reputation: 19
Quote:
Originally Posted by whtviper1 View Post
Have you thought about asking an actual realtor on Kauai?

With that said, my opinion is anything legal is worth more than illegal. How much to conert to legal ADU?
Oh yes, I asked several involved with the purchase of the home ( long time experienced here, a few top sellers and I won't bore you and will just say it started with claims of this great added bonus to the property, and when pressed to understand it better, we were met with a lot of vagueness in responces and implications to do our own sourcing for the answers elsewhere. It's not like we bought it for this, the view alone had us. We wouldn't rent illegally either.

I know enough now to know as of now that if we get a stove for it ( already sold off the white appliances it came with ) we need an ADU permit, or we can rent long term, just need to furnish it with things like hot plates, toaster ovens and microwaves for cooking instead. I honestly don;t get the significant difference between a tradition electric stove and a large electric toaster oven/hot plate but appearantly it's significant. Either way, a business License is needed for paying income tax.

We wouldn't rent illegally.

The permit is only $460. Not a major concern if once clearance is approved, it should get permitted and if it doesn't have to be renewed regularly. Seems like the biggest hurdle, which is really a major time commitment since its hard to catch people int heri offices or with systems up and working, is getting clearance from 7 diifferent departments. To get install a second stove oven, I basically need to go through all the steps one would have to, to build a home. Just weighing it all out and peoples experience here and insight will be of great help!!!
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Old 06-26-2017, 10:16 PM
 
Location: Kailua
8,376 posts, read 10,293,218 times
Reputation: 3790
Well - I'd permit it. My opinion.

You might not get more in rent (or you might) but a decent chance you'd rent it faster with a stove (or not - but probably)
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Old 06-26-2017, 10:16 PM
 
35 posts, read 11,558 times
Reputation: 19
Quote:
Originally Posted by pj737 View Post
From a rental standpoint (assuming it's for one or two-person occupancy only), I would say the rent difference would be zero. While all my rentals have full size ranges, I have a good number of tenants that NEVER use the oven part of the range. Lived there for 5 years... open the oven and clean as a whistle with the instruction manual still in it - no joke. Most of my rentals are smaller though... meant for single or double-occupancy. Nowadays (thank you, technology), you can get fancy counter top ovens that bake, broil, etc much faster and more efficiently than standard ranges... and the food comes out much better with far less clean up. You can also buy induction hot plates (single or double) that cook food much faster and efficiently... and then you just throw them into the drawer right after cooking (they cool down instantly). So when you're not cooking, you have much more counter top space in your kitchen. This is particularly nice in smaller kitchens where counter top space (and cabinet storage space) is at a premium.

Unless your tenants are hardcore chefs or like to cook meals for groups of people, there is zero value (to at least some tenants) to having a full sized range in your rental. Personally, I think it's silly that tiny studios and one bedrooms here come with the exact same cooking appliance as 3,000 SF 5-bdrm homes. It's as if they got everything to scale in the home... BUT the cooking appliance. The only reason they likely still exist is because banks require them to underwrite their loan products. Otherwise the space available in the tiny kitchens could be much better utilized with a smaller counter top integrated two-burner cooktop and a microwave (with vent) that also doubles as a full-functioning oven.

However, from a resale standpoint, having the ADU legally permitted would definitely add value. If you don't have comps in the area that additional value is anyone's guess... but I'm sure anyone would agree it would sell for a chunk more than a SFH without a legal ADU.

Did you check to see if the property allows for legal Ohana units? These generally don't have any size restrictions (but must be attached)... and if sold, will sell for far more than a home with an ADU on it.

I saw the new appliances you mentioned and they are really nice!!! It would be for a single or couple at most and yes, this property is Ohana cottage eligible. ( that project is years up the road) On kauai, they use ADU to name a second family dwelling. They acted confused when we called it an Ohana here. lol

We can only rent the mother in law, or, a cottage if we build one, not both while living in the main house on the second floor.

I can't find any comps with an ADU permitted rental. That along with why the realtors were not sure how to answer questions makes me wonder if anyone that tries to go through the hoops acutally ever gets one. And so far here it looks like no one has.
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Old 06-26-2017, 10:22 PM
 
35 posts, read 11,558 times
Reputation: 19
Quote:
Originally Posted by hotzcatz View Post
A lot of people like stainless steel, although I just see them as fingerprint magnets. Fortunately for your future renting possibilities, I'd suspect my choice of kitchen appliances is not mainstream.

How's the housing on Kauai? Tight like on the other islands? When we listed a house to rent we ended up with a deluge of applicants. They had to write an essay on why they wanted to rent the house. That sorted two thirds of them out of the pile right away.
Very tight indeed. Most rentals under $2,000 never make it to being listed and if they get listed, don't last long. Like with any property in Hawaii, if you are priced right, it will fly fast.
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