It’s not a secret that Los Angeles has a severe housing crisis. A recent report revealed that the number of homeless people in the city has grown from 33,500 in 2010 to almost 60,000 in 2019, even in spite of a drop in homelessness nationwide. The main issue is the high rent price in LA, which average between $2,000 and $2,500.
This terrible situation has resulted in the rapid growth of the ADU building and rental market. Many people see this small accommodation as a win-win situation where landowners in Los Angeles can have an extra monthly income, and tenants can rent an affordable and brand new home.
Nonetheless, when you rent out your ADU/garage conversion/granny flat, there are some things to consider and be aware of. First of all, you have to contemplate all the factors of renting into account. This includes screening tenants, placing ads, and deciding how to cost-share utilities.
The average rent for an ADU is $1,500 a month in Los Angeles. After monthly expenses, including utility fees and upkeep costs, you can expect to make about $850 of income per month from your ADU. But not everything is profit; some responsibilities come with having this rental unit in your backyard.
What are some of the landlord’s responsibilities?
First, you are required by law to maintain the property for your tenant. You should preserve things like doors, windows, and plumbing. In fact, the landlord is not supposed to collect rent until the unit is considered habitable.
Landlords are not allowed in their tenant’s unit without giving a previous notice first unless it’s an emergency. That means you must provide your tenant notice if someone is coming to make repairs or if you want to show the unit to future renters.
Also, it’s illegal to discriminate against a tenant who’s using a Section 8 voucher to rent the ADU. That doesn’t mean you have to rent to a potential tenant with a Section 8 voucher, but you cannot use that voucher as the sole reason for rejecting that person’s application.
Where do you find a tenant for your ADU?
When thinking about screening tenants, have in mind that ADUs are very close to the main residence, so you may want to consider what qualities you are looking for in your future lodger. If you would like a competent and reliable tenant for your ADU, you may want to:
- Advertise your ADU on rental and real estate websites.
- List your ADU online, preferably on recognized websites such as Craigslist or Facebook Marketplace.
- Contact a property management company or real estate agent for help.
The demand for this compact form of accommodation is definitely on the rise and owning an ADU is definitely a pride now, but getting it right is equally important. Do you have more questions about ADU Construction in Los Angeles? Call us at (310) 974-3174 or schedule a free consultation.