What to Expect
PROS
Additional Income Potential: DADUs can be used as rental units, providing an additional source of income for property owners.
Increased Property Value: Adding a DADU to a property can increase the overall property value, as it provides additional living space.
Flexibility of Use: DADUs can be used as guest quarters, additional living space for family members, or rental units. This provides flexibility for property owners.
CONS
Zoning and Permitting Requirements: DADUs are subject to zoning and permitting requirements, which can vary by location. These requirements can impact the feasibility and cost of adding a DADU to a property.
Construction Costs: Building a DADU can be expensive, you’re building a whole 2nd home after all, and construction costs can vary depending on the size, design, and location of the unit.
Potential for Increased Property Taxes: Adding a DADU to a property can result in increased property taxes, as the overall property value may increase.
ROI
Property Types
DADUs can be constructed in a variety of styles, from modern to traditional. It is important to consider the property type and location when determining the feasibility and design of a DADU.
Market & Competition
When considering adding a DADU to a property, it is important to research the local market and competition. This can help determine the potential demand for rental units and the feasibility of adding a DADU to a property.
Overall, DADUs can be a valuable addition to a property, providing an additional source of income and increased property value. However, they also come with potential drawbacks, such as zoning and permitting requirements, construction costs, and potential for increased property taxes. It is important to carefully evaluate the potential ROI, property type, market and competition, and any potential challenges or opportunities associated with adding a DADU to a property. With proper research and due diligence, a DADU can be a successful investment strategy.
