How to Transform Your ADU into a Long-Term Investment – TOP 5 Explained

How to Transform Your ADU into a Long-Term Investment

It’s not uncommon for individuals to approach us with a strict budget for their ADU. This is understandable, given that it represents a significant financial commitment. However, we want our clients to start thinking of their ADU’s as longterm investments. Investing in an ADU and thinking of transforming your ADU into a long-term investment offers:

• Long-lasting financial security
• Later in life care options
• Potential for Multi-Generational wealth and protection

The obvious and often most sought after reason for building an ADU is for the rental income, and even if that is the most immediate need of your ADU, there are some structural aspects and choices you can make in order to enhance the space and increase the liklihood that it will offer longterm solutions for you and your family.

Unlike building a personal home, an ADU serves as an extension of your financial portfolio, family trusts, and long-term care strategies. While many people seek the most affordable ADU to quickly complete their project and potentially begin earning rental income, we have compiled our top five considerations for ensuring long-term success and maximizing your investment.

OUR TOP 5:

1. SUSTAINABILITY: Consider incorporating sustainable materials and energy-efficient appliances to ensure that your ADU is environmentally friendly and cost-effective over time.

• • • Energy-Efficient Windows and Doors: This will reduce heat loss in winter and keep the space cooler in summer.
    • Energy-Efficient Appliances: Install ENERGY STAR-rated appliances in your ADU, as they will use less energy and water.
    • Smart Thermostats and Lighting: This will help to reduce energy use and smart thermostats offer comfort settings.
    • Insulation: Don’t skim on the insulation, it reduces heat transfer between the inside and outside of a building.

2. HARDSCAPE/LANDSCAPE: Even if you cannot add a full landscape budget for the first phase of your ADU, at a minimum consider a hardscape budget that will include a long-term plan for your hardscape and landscape.

• • • Concrete: Install all concrete, flat scape if possible with your first phase (patios, pathways, driveways). This will save time and money later

    • Outdoor plumbing: Plan for future exterior plumbing in the first phase by designating  future drip system location (for eventual softscape, plants, flowers and gardens) , future outdoor shower locations, outdoor sinks etc.

    • Lighting / Electrical: Designate future electrical for exterior lighting, pathway lighting, patio lighting, overhead lighting (its;s way more expensive to go back later and add electrical access or electrical upgrades)
    • Privacy: Even if you cannot incorporate fencing, plants, hedges etc privacy into the first phase, have a plan for privacy in your 2nd or 3rd phase.

3. INDOOR / OUTDOOR LIVING ACCESS: One of the most effective ways to create a successful long-term space is working with a Design and Build team that will see the vision for indoor and outdoor living. 

• • • check out this article on indoor / outdoor function for more reasons why!
    • Guests & Family: If your ADU is an extension of your living quarters for multi-generational use, guest use, party use, then allowing the ADU to open up the the main house yard, pool or landscape is a huge bonus.
    • Lifestyle: By installing types of doors and or flip-out windows, large windows whenever and wherever  possible to achieve the ideal Southern Californian indoor-outdoor flow. Here are reasons why this is important:
    • Rental Purposes: If you are renting your ADU and in this case providing privacy to the renter, then providing them with indoor/outdoor living space will make their smaller space feel larger, more expansive, and give them an experience of spaciousness.  This will create longterm contentment for your renter and keep a good Tennant in your ADU longer ensuring longterm financial success.

4. FUTURE / ADA / ACCESSIBILITY: Don’t underestimate the value of a design that will incorporate long term care in mind.  Of course this can always be done later, but it can also be thoughtfully planned into your ADU design from the very beginning.

• • • Design Choices: Thoughtful design choices like wider doorways, step-free entrances,  ensure that the space is welcoming and usable for people of all ages and abilities.
  • • Bathrooms: Bathrooms can be designed to be more spacious, accommodating wheelchair access without the need for barriers in showers, baths, or height variations in flooring. Creating a seamless and open space ensures easy access for the long term.
  • • Forward Thinking: Ultimately, designing with accessibility and future needs in mind reflects a commitment to creating spaces that support independence and dignity for everyone. It’s a forward-thinking approach that not only benefits those who will use the space today but also anticipates and adapts to the changing needs of tomorrow.
  • • Future Caretaking: Future Caretaking: Your ADU represents an investment, and since the future is often uncertain, it’s possible that one day your children or another caregiver might be looking after you, while you reside in the ADU. Planning for long-term care in advance is a wonderful gift to yourself.

 

5. SEPARATE UTILITY METER: What you don’t pay for now you will pay for later, and often at a greater Expense.

• • • Upfront Cost: Its better to add this as a line item from the very beginning.  Often times your contractors  will cut corners only to find out that your local agencies do require separate utilities for the ADU.
• • • Eliminates future headache:A separate gas meter allows the ADU to function independently, and the  gas supply can be turned off or on without affecting the main house. This is helpful in situations where the ADU might be used as a rental unit or guest house, or if upgrades are going on to the main house it will not affect the ADU and vice versa.

 

Don’t hesitate to reach out to us with any questions. We would love to hear all about your ADU dreams and goals.  Please schedule a call with is to go over your project:  reach us at janeene@coatdr.com

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