Angelenos capitalizes on booming real estate market with ADUs – CBS Los Angeles
LOS ANGELES (CBSLA) – When the pandemic hit, many people suddenly found themselves with extra time and got to work with home improvements, so much so that it increased the cost of wood. This period then sparked off one of the hottest trends: turning homes into income property.
“It has been more financially useful than we thought,” owner Mike Horowitz told CBS2 News This Morning’s Suzanne Marques.
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A charming studio cottage in the backyard of the Horowitz house in Atwater Village has become a little slice of heaven. Until a few years ago, it was a garage.
“The house was built in the 1920s, and it was a little garage that we didn’t use, mainly because the driveway was so narrow,” Horowitz said.
Horowitz therefore converted the garage into what is known as an Accessory Housing Unit (ADU). It is a licensed house that can be rented or used to house family members. Horowitz rents him and now earns thousands of dollars a month.
“In a good month, it’s better than our mortgage payment, which is incredible,” Horowitz lamented.
To help alleviate the state’s housing shortage, California earlier this month passed Senate Bill 9, which allows homeowners to build multiple units on their land. It’s so new, there are no set guidelines, but the demand is expected to increase. The hope is that cities can meet demand and make the approval process easier, often making projects much longer.
Chen Yaacov specializes in building ADUs with his company Pearl Remodeling based in Reseda. The most common ADU is to convert a garage, normally around 400 square feet for a studio or bedroom.
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“The first step is obviously to find out what you can and cannot do because there are certain restrictions that the city can apply for one property rather than another,” Yaacov said.
When the pandemic hit, business was quiet for a few months, then Yaacov’s phone started ringing.
“People are making their domain a lot more comfortable for them, realizing that they could stay at home more than before,” Yaacov said. “People are definitely thinking about how to get more money and how to use things better. If somebody had an office that they rented, and now they were like, “You know, I can have my own office. “
Yaacov says there are two main things to consider if you are considering renting out your space. The first is whether you are comfortable with the guests who are staying at your property. The second is the cost. ADUs can cost anywhere from $ 50,000 to $ 100,000. He says fairness has made buying a lot easier.
“Even if you don’t have the money,” Yaacov said. “If you are doing well, and you are planning to make some extra money and increase the value of your home, and you don’t worry about the people in your property, then this is the best investment you can make. can do because you’ll be making money the day we finish building and you start renting it.
Even if you aren’t renting out your space, increasing your square footage is one of the fastest ways to increase the value of your home.
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“Our initial calculation was that, at the very least, it would help the property’s value,” Horowitz said. “So while you’re building something you always wonder if it was a good idea when, you know, the construction is going on and it’s kind of a disruption. But we found it surprisingly useful.