The Garcia family, located in sunny California, faced a common challenge as their family grew: the need for more space. With adult children struggling to afford the cost of purchasing a new home close to their parents, they decided to explore the idea of adding an Accessory Dwelling Unit (ADU) to their property for multi-generational living. The idea was for the parents to move into the ADU designed for barrier-free living and aging-in-place, while the younger family members moved into the main house. Little did they know, this decision would result in a great return on their investment and much more.
The Decision to Invest in an ADU
After careful consideration and research, the Garcia family made the decision to move forward with building an ADU in their backyard. They saw it as an opportunity to create additional living space for their family, and also as a potential source of rental income in the future. The flexibility and potential for a high return on investment made the idea even more attractive.
What pushed them in this direction was the incredibly high cost of purchasing a single family home in California. The cost of building a new construction detached backyard ADU was approximately half the cost of buying a new home which made this decision a no brainer for their family.
Construction and Design
The Garcia family wanted a high quality design but also were hoping to minimize the cost of the design process as well as cut down on the time a custom design would take. After researching a variety of options including hiring an architect for a custom designed ADU, purchasing a prefab ADU, or going with a pre-designed ADU plan set, they decided that starting with the pre-designed plans but then customizing their prefered plan to fit their needs was the best approach - balancing cost and quality.
They worked closely with our team of professionals to adapt one of the modern ADU plans for sale. The unit was designed to be a comfortable, fully functional living space complete with a kitchen, bathroom, and large bedroom that offered great views to the backyard garden. The thoughtful ADU design was focused on barrier free living and aging-in-place perfect for their parents to move into and age gracefully. Although it was designed for elderly residents, the high-quality design will enable the ADU to be a desirable living space for potential renters in the future. This gives the new backyard ADU the flexibility for immediate needs and long term financial return on the investment.
Return on Investment
After the completion of the ADU, the Garcia family enjoyed the immediate benefits of the additional space. Their adult child who moved into the main house, was able to afford their own home for their growing family while still being close to their parents. They also had the added benefit of child care close by. The ADU saved thousands of dollars each month compared to the rental prices in their area. It also will be a lot cheaper than having their parents move into a retirement or assisted living home in the future.
They also have a ready made rental unit in the future that they estimate would bring in between $2,000 and $3,000 dollars per month in rent if/when they decide to put it on the market. This will give the young family additional income and provide financial flexibility.
Added Property Value
The backyard ADU not only provided financial benefits but also added value to the Garcia family’s property. The increased square footage, modern design, and the versatility of having an additional living space on the property boosted the overall value of their home. Should they decide to sell in the future, the presence of the ADU could potentially attract more potential buyers and increase the resale value of their property, potentially by hundreds of thousands of dollars. Taking the tight residential real estate market in California into consideration, and they anticipate the value to continue to rise significantly over time.
Conclusion
The Garcia family's decision to invest in building a backyard ADU proved to be a wise choice and one that thousands of families are deciding to make each year. From providing much-needed space for their growing family to generating a significant return on investment through rental income and added property value, their backyard ADU has been a great success. Their story serves as an example of how an ADU can be a wise investment, providing practical and financial benefits for homeowners. If you’re considering adding an ADU to your property, the Garcia family's experience is a testament to the potential rewards that come with this decision.
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Thank you for the opportunity to share this story and highlight the positive impact of adding an ADU to a property.
