Thoughts on ADU properties?

[MrRational]

Originally Posted by mikefong123

Thoughts on ADU properties? (cash, fees, dividends, invest)

#1? Don't fool yourself into thinking it's an investment.
It's a continuing expense requiring large outlays or new debt to initiate.

It can be a useful expense if/when the user and their needs align well with the homeowner/family overall.
eg: Putting the in-laws into a nicely converted attached garage - it's almost a no-brainer.
Similar applies with many lower level conversions made into a habitable "MIL apt" space.

If/when... that space can later be re-used the same way or for many other marketable purposes.
Doing much more though, certainly if that entails demolishing other existing features, goes too far.

If one really want to get into the bottom end of the very retail oriented land-lording business
then do so by starting with a property purchased with that commercial use in mind at the outset.
Don't force the use onto a property designed for owner occupied residential users.

[Citykid3785]

In general I am pro real estate investment.

To me, this is a no go for the following reasons:

1) most people underestimate the cost/time/energy of construction
2) loans are comparatively expensive right now
3) Do you want strangers on your property
4) Do you really want your immediate family, your extended family, and strangers on your property at the same time
5) as you are now 50, this move will steal a bit of our liquidity at a time when you may need it more (starting to think about retirement
6) dealing with local zoning laws, restrictions, and their ability to change

I'm not an ADU expert, but unless you are lending a serious hand in the build, I doubt you can do it for $150K in California