Should You Add an ADU to Your San Diego Property?

Accessory dwelling units can be an outstanding addition to your property. Used to provide either comfortable housing for friends and family, or an income-generating investment that adds value to your property (or both!), “ADUs,” are a separate space that is either attached or separate from your own home. Useful in many regions, ADUs in San Diego are highly beneficial. 

They can be small structures that are entirely separate from your home, or they can be sections of the house that have been sectioned off, making them essentially a small apartment.

Benefits of an ADU

People build ADUs on their property for a variety of reasons, but it usually comes down to one or two motivations:

  1. Providing a home for a loved one
  2. Earning a monthly income

ADUs are excellent options if you want to provide a safe, comfortable home for a loved one that is near your house. Elderly parents who don’t need full-time medical attention, but could use help with daily living, often benefit from an accessory dwelling unit. They can live in the small apartment, enjoy their own private space, yet still have the nearby support and assistance of one of their children. This can also be a more affordable option for the parent, although how the finances of building the home, paying for renovation loans, and other financial factors will depend on the family.

ADUs can be useful options for older children who want more privacy. Even if they are not used as a family member’s living quarters, they can be useful as a separate office space or an area that is separate from the main home. (Think man-cave, home bar, craft area, etc.)

Why ADUs in San Diego are Excellent Home Additions

ADUs can be useful home additions in practically any city, county, or state. But ADUs are particularly important in certain areas. San Diego, it seems, is one of those areas.

ADUs are great for any area, but they seem perfect for San Diego.

San Diego has a list of reasons that make accessory dwelling units extremely beneficial. Mostly, it has to do with the simple lack of housing options in the area. San Diego, like much of California and many other areas of the country, is experiencing a housing shortage; there simply aren’t enough houses and apartments. ADUs could ease this shortage. This is part of the reason that the state has made it easier to build accessory dwelling units.

As a property owner in San Diego or the surrounding area, you could earn a strong income if you create an ADU. Exactly how much you earn will depend on the quality of the space, the neighborhood, your proximity to attractions and entertainment, and the size of the ADU, so it’s hard to say how much you might earn. However, San Diego apartments and rental homes are known to bring in a high monthly figure.

Here are some of the figures given by top apartment and rental-information websites:

An ADU is smaller than a typical property, so it’s possible that you may not be able to get this much. But take Rentcafe’s information as an example. They say that an 876-square-foot space can bring over $2,400. Many ADUs will be somewhere near this size, so getting this amount is not out of the question.

If you have a rental space in San Diego, you’ll not only have a strong income-earning space, you’ll likely see consistent demand for this living area. San Diego and the surrounding areas are experiencing a shortage of for-sale houses and available apartments. Because the region attracts people from all over the country, it’s expected that demand will continue in the future. Building or buying any rental property is a risk, but with so much demand for housing in San Diego, it seems reasonable to assume that the risk is reduced.

The Rules for ADUs in San Diego County

Each city has unique rules and restrictions for ADUs. San Diego is no different. While California has made it easier to qualify for building an ADU, there are certain rules you still need to follow.

According to the County of San Diego, Planning & Development Services, the total square footage of the ADU cannot exceed 50% of the square footage for the main property. So if your single-family home is 2,000 square feet, the ADU cannot be more than 1,000 square feet. There is also a maximum amount: 1,200 square feet. Regardless of the main home’s size, the ADU cannot be over 1,200 square feet.

The ADU cannot exceed 24 feet in height, and only a garage can be attached to the unit. It also can’t be a short-term rental property, such as an “AirBnB” vacation home. According to Planning & Development Services, the accessory dwelling unit cannot be rented out for less than 30 days.

These are just a few of the rules; we certainly won’t bog you down by covering them all. We bring this up to simply make the point that if you plan on building an ADU, you should be well-versed on the rules in your area.

The Support You Deserve for Your Renovation Loan

If you are considering an ADU for your San Diego property, but aren’t sure how to pay for the construction and remodeling, our team may be able to help. With access to some of the best renovation loans on the market, we can help you secure financing for these important projects.

There are many options available for financing the construction of an ADU. Home equity loans are common choices for homeowners, but a HELOC could also be a good option if you need to complete a separate unit. If you want to build an ADU in San Diego and get a lower interest on your mortgage, a cash-out refinance may be right for you.

Contact our staff today to learn about financing options such as home equity loans, HELOCs, and cash-out refinances.