You may be working from home, but are you fulfilling life's potential? While you may be confined at home most of the days, it doesn't mean your mind should be kept inside a box. It is through such a crisis that everyone should be exploring creative financial solutions while joyfully adapt through life's changes.
Now put aside the negative news surrounding us and let's talk about the best news we all know as of 2020. Thanks to the new ADU legislation, homeowners are given opportunities just by adding square footage to our homes, legally.
As of January 1, 2020, the California state law on Accessory Dwelling Unit (ADU) gave homeowners the chance to do so without possible interference by the local authority (state law trumps over city/county law). There is a very simple summary / quick guide made by California Association of Realtors (C.A.R.) regarding this breakthrough ADU law.
In essence, homeowners are legally allowed to create additional space for their home, which will lead to increased intrinsic valuation of the homes.
Additional space is not the only benefit of having an ADU, which offers many other advantages. An ADU can allow for out-of-town guests to stay in the house without invading the homeowner’s privacy. It can house the homeowner’s adult children without interfering with their lives (both the children’s and parents’ lives).
Back to our main point, an ADU can be the homeowner’s source of reliable passive income when it is leased to a tenant. Who wouldn’t like a passive income? Even better, the homeowner can travel and live elsewhere while leasing out the main house and the ADU. Double passive income.
ADUs are becoming an increasingly popular housing option but it can also be costly. The typical Southern California ADU roughly costs $150 to $250 per square foot (design and build, excluding permit fees) depending on the type of ADU (detached or attached) and the finishing materials used on the unit.
However, there are a few alternatives to finance the ADU: cash, mortgage refinancing (if the house is paid off), HELOC, or builder’s in-house financing.
Chisel & Tool offers hassle-free ADU-packaged programs for qualifying homeowners. Building the ADU at no cost to the homeowners, this creative financing program allows homeowners to enjoy the capital gain on their homes without forking out upfront money.
Find out more about the special ADU-packaged programs here.