San Jose, CA Top Ranked Accessory Dwelling Unit Builder

SAN JOSE ADU SOLUTIONS


LICENSED ACCESSORY DWELLING UNIT (ADU) CONTRACTOR IN SAN JOSE, CA

The accessory dwelling unit (ADU) market has exploded over the last 5 years and is becoming one of the best investment opportunities available for property owners in the Bay Area. So what makes an ADU so special? There are many things that an ADU can provide that make it such a surefire investment for your family. ADUs have become increasingly popular, and it's not hard to see why. An accessory dwelling unit has all of the comforts of home in a more compact space which is a perfect solution if you are looking for a guest house or a rental property. Not only can ADUs make life easier, but they will also give you the opportunity to generate passive income and dramatically increase your property value at the same time! Building an ADU Has many benefits, from steady cash flow to instant equity, and below, you can see why you should consider an ADU for your property.

Please make sure you understand these 6 VERY important ADU questions!


We understand some of these answers are lengthy, but it is extremely important that you understand just how big of an opportunity an accessory dwelling unit (ADU) can be for families in San Jose/Bay Area specifically.

  • 1. What exactly is an ADU and why is it such a growing market in California?

    ADUs are additional housing structures built on a property that already has a primary home or dwelling. These tiny homes come in many shapes and sizes and can be completely customizable. ADUs have many other names you may hear them referred to by, such as granny flats, guest houses, or in-law suites, but they all have the same type of structure and purpose. These homes have many benefits available for you to dive into and can be built on both a single-family lot and a multifamily lot. ADUs have their own entrance as well as other spaces such as kitchens, living areas, and bathrooms. In addition, ADUs can be wholly detached from housing and stand-alone or be attached, such as converting your garage. For a more detailed comparison of attached vs detached ADUs, please click here.


    Tiny homes have become increasingly popular for many different reasons, whether you are looking for the perfect guest house or wanting passive rental income. Accessory dwelling units  are the ideal opportunity to add value to your home while also making a profit. ADUs can be used for a number of different reasons, which is why they have become so mainstream in recent years. 

    ADU construction has never been easier since a new package of bills was passed in January of 2020. Now, in California, you can enjoy this luxury tiny home and all of its benefits because of this new series of bills. Some of these new laws include the ADU permits and how they are automatically approved for single-family homes and can be built on multifamily properties. 


    These new laws that were put into place make building an ADU legal on a state level, invalidating any city ordinances. Not only do these laws permit the rebuilding of ADUs, but they also ease the process as a whole. ADUs can now be built in HOAs without any hassle, and cities must approve ADU applications within 60 days. Some of the other burdens lifted include the ADUs made by 2025 don't require the owner to live at the property, and ADUs can be developed at the same time as the primary unit. With these new laws in effect, it has never been easier to gain permits and build the perfect ADU for your needs. 

  • 2. Why is an ADU one of the best real estate investments in the Bay Area?

    Let's face it. Real estate and monthly rent averages are pretty high when you're living in the Bay Area. The average real estate costs in the Bay Area are approximately $1.3 million, and rent can cost as much as $4,000 for a two to three-bedroom home. So, as a homeowner, one of the best investments you can make is in your home. 


    With California's updated laws regarding ADUs, homeowners can gain instant equity by simply adding an ADU to their property. These units offer an affordable way to increase your cash flow. For example, with starting costs only ranging from $350 to $450 per square foot, ADUs can pay for themselves. Suppose we build an ADU rental home on your property that adds a monthly loan payment of $2,000 to your mortgage. In that case, your tenant's rent should be roughly $3,000, netting you $1,000 profit every month. Utilizing your ADU as an AirBnB is another excellent way to cash flow your ADU investment. 


    Not to mention, these units add tremendous value to your home, meaning your home equity will drastically increase by building an ADU on your property. Your home equity is the difference between what your property is worth and how much you still owe on it. Here in the Bay Area, an ADU will add approxiamately 150% of the total costs in equity once the project is completed. For example- if we build a 750 sq ft ADU on your property at a build cost of $400/sq ft for a total of $300,000, you can expect that your property value will go up by approximately $450,000 upon the completion of the project. Talk about an instant ROI!

  • 3. How much does it cost to build an ADU in the Bay Area?

    You can expect to pay between $350-$450/sq ft. for us to build an ADU in the Bay Area. Typically, the price per square foot will decrease as the ADU square footage increases, simply because there are a lot of fixed costs associated with building an ADU no matter what the size is. The larger your ADU, the larger your return on investment will be when it comes to property value and potential rental income. Keep in mind, we are a one stop shop and will be involved with the process every step of the way.

  • 4. How can I finance the construction of an ADU?

    Not everyone will have the cash on hand to fund the development of an ADU. Fortunately, there are a lot of great lending options because banks realize how much an ADU will increase your property value, making it a low-risk investment for them. For a more detailed explanation of ADU financing options, click here.

  • 5. How can an ADU benefit my elderly family members who need assistance?

    With nursing home costs averaging around $11,000 a month for a private room, the Bay Area is an expensive place to need professional nursing care. However, you can avoid these costly expenses and add equity to your home with an ADU. Your ADU can function as an alternative to your elderly loved ones who need assisted living. 


    ADU financing options typically average between $1,500 and $2,500 per month (primarily depending on the size of your ADU at approximately $350-$450/sq ft). Compared to the $11,000+ per month you'd be spending on a nursing home facility, you'll be saving a fortune while benefiting your family and your property at the same time. In addition, using an ADU as a nursing home alternative will afford you more time with your loved ones and a comfortable place for them to live surrounded by loved ones. 

  • 6. What are some other beneficial uses of an ADU?

    ADUs make the perfect guest house as well. Whether you frequently have friends and family over to visit who need a place to stay during, or if you just want to have a place to spend a night or two out of your house once in a while, ADUs are perfect. In addition, even if you're using your ADU as a guest house, that doesn't mean you have to give up your cash flow opportunities. For example, you could use your guest house ADU as an AirBnB and rent it out to guests between your friend and family visits. The average AirBnB in San Jose costs around $250 to $300 a night. So, even if you only rent your ADU out as an AirBnB a few times a month, your loan payment is covered by your rental income alone. If you rent it out more often than that, then you're only adding to your cash flow from the ADU while giving your friends and family a beautiful place to stay whenever they come to visit you. 

We Will Handle Your ADU Build From Start to Finish

Why should you use an ADU Contractor that handles the entire design & build process?

Expedited Permitting Process

Permitting can be a time consuming process, but when someone from the San Jose city or county needs to get questions answered it is much faster when they only have one company to deal with so they can issue the appropriate permits.

Streamlined Communication

Sometimes it can be confusing to know who to ask about a specific question or concern regarding your accessory dwelling unit. Design changes will affect budget and construction costs can often affect design. Getting everyone on the same page with these changes can be challenging. When you work with us, you can be assured that you will have a direct line of communication so your questions can be answered quickly and thoroughly.

Faster Turnaround

By working with a single company that handles design and construction, you eliminate the delays of back and forth communication and misunderstandings that are common when multiple companies are working together on the same project. It is estimated that the turnaround time can be 25% faster by working with a design-build company like us.

Cost Savings

Each company has a certain amount of overhead costs and desired margins and those costs are passed on to their customers. By working with someone like us for the development of your ADU, we can shave a lot of those extra costs off which ultimately results in more money in your pocket.

ATTACHED VS DETACHED- WHICH TYPE OF ADU IS RIGHT FOR YOU?

When you want to build an ADU on your property, you'll need to choose which type you want. There are two primary types of ADUs: attached ADUs and detached ADUs. Each offers its own benefits and building process. Below, we'll dive into these ADUs, what goes into them, and how they're made to help you decide which would be best for your needs.

DON'T LET ADU FINANCING STOP YOU- WE CAN HELP!

Our company offers a range of incredible lending partners who can help you every step of the way to finance your ADU project. If you want to build an ADU on your property, you shouldn't have to let uncertainties with money prevent you from contacting us. We can help you navigate all of our financing options, find the best fit for you, and get started financing your project. Remember, your ADU will pay for itself with the right strategy and provide you with additional income. 

01 Cash Out Refinance

If you choose the cash out refinance method to pay for the ADU project, you'll be utilizing your home equity. Remember, home equity is the difference between what your home is worth and how much you owe on it. You'll cash out your equity and refinance your mortgage. This financing option offers low-interest rates, and you should easily be able to earn enough income on the ADU to more than cover your additional payment to the bank. 

02 HELOC

HELOC stands for Home Equity Line Of Credit. This financing option involves issuing a homeowner a line of credit, much like a credit card, based on their home equity. These loans have variable interest, meaning your interest rate can change during the loan agreement. With a HELOC loan, you only pay interest on the money you've drawn from the line of credit instead of having a lump sum that you pay interest on throughout your agreement. These loans also typically have around 20 to 25 years of pay-off. 

03 Construction Loan

A construction loan is best if you don't have equity. These loans are based partially on your equity but primarily on your income and credit score. The process involves refinancing your mortgage based on the future projected value of your property after the ADU construction. They're short-term loans with high interest, but they're the perfect option for homeowners with no equity to work with yet. The process entails submitting the loan application and, if you're approved, you don't get the money until a contractor gives a detailed estimate. That's where we come in. Our team will ensure we help you design an ADU that fits your loan budget, and once you're approved, you'll reappraise and refinance your home. 

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