Thursday, April 30, 2020

How to Plan Financially While Building an ADU On Your Property


Building an accessory dwelling unit (ADU) on your property is an important investment. You have to consider several parameters before you start the work with the right team of professionals. If you can do it right, you may not only save on your budget but also get high returns on your investment. Hence, it’s important to create a proper financial analysis and develop a robust plan for getting the ADU built according to your expectations and preferences. 

Let’s start from the beginning. One mistake that you should avoid while looking for ADU contractors is settling for a lower price than the market standards. It’s unwise to choose a contractor, who offers the lowest bid among its competitors, because nothing comes for cheap, and certainly not an ADU. But you can always plan to stay on budget without compromising on the quality of the project, and the following suggestions will tell you how. 

Choose a knowledgeable and reliable contractor
Selecting the right builder is one of the essential requirements to maximize returns. They should be aware of the local guidelines regarding property extensions, including the permits needed for utility lines, the height of the cottage, its fences, and other key requisites. 

If the contractor is unaware of the same, it may increase the costs of construction, as new permits will need to be acquired, giving rise to further hassles. They also need to hire a licensed and experienced plumbing team to ensure proper installation and avoid construction mishaps. All the additional permits should be effectively handled by the team of experts so that you are left with no headache. 

Hence, it’s best to go by the standard rates in the market and not to fall for cheaper proposals, as the quality will be hampered then. Talk to the contractors, whom you have chosen, about your budgetary inclusions, so that they can give suggestions to cut down costs, without degrading the quality of the process. 

Save costs on design 
Design and construction are not the same, though they mostly come together. Many companies may offer to do both in exchange for a considerable payment, but it’s best to work with an experienced contractor. Experts at Acton ADU suggest that a good company can help you with the design besides completing the construction work. Otherwise, you may need to spend an extra amount of money on designing the unit, thus exceeding your budget estimates. 

The costs of designing an ADU depend on the purpose you’re going to use it for. If you plan to rent it out, you have to make sure that the unit is self-sufficient, ensures 100% privacy and security besides other things. Now, if you plan to keep your elderly parents or in-laws in the unit and take care of them, you should also install additional alert systems and provide security provisions to ensure maximum convenience. 

Thus, the design is an important consideration while building the ADU and should be included in the package to save additional expenses. So make sure you discuss the same with your contractor before starting the work. 

Get educated on the ADU construction market
You don’t and you can’t become an expert within a few weeks. But you should always do some research and readings on the ADU construction requirements, costs, market analysis, and probable issues and of course, the regulations. If you know what it takes to build an accessory dwelling unit in your backyard, you’ll be able to choose the right contractor for the project. 

Many areas are not permitted for building ADUs on the property. And even the good zones have certain restrictions regarding the same. While certain restrictions have been lifted in California lately, you should be updated with the current information by all means. You can visit the local city offices to acquire knowledge about the zone requirements and plan your project accordingly. 

This will help you prevent losses, which may incur if you start the project without proper analysis. For example, say you invest some amount of money in building the ASU and pay the contractors in advance. After half of the work is done, you learn that the construction didn’t cater to the regional requirements and you need to stop it immediately. 

Chances are, you may not get your money back, and the money that has gone into the project will be lost forever. Hence, better be prepared and aware before starting the work. 

Opt for a company that gives warranty on their services
Warranties can help you save a lot of money, in case the unit faces repair or maintenance-related issues in the future. By talking about warranties, it’s not a 90-days thing that will get over before you could even blink. Even one season isn’t enough to understand the quality of the work that has been put into building the ADU. At least a few years of warranty should be provided on the construction of the unit. 

You should opt for a company that assures some years of warranty on their work and stands by you in case an issue arises. A reliable contractor will never risk its relationship with the client. The number of days they provide free repair and maintenance services says a lot about their confidence over the quality of their work. 

Determine the purpose of the ADU
You should make up your mind about the purpose you’re building the unit for before you start looking for a contractor. Are you planning to keep your aged parents there? Or you want to start a business and use the ADU as your home office. Of course, you can also rent it out. You should create a budget according to this plan by analyzing how much dividends it’s going to pay you in the long run. 

If you plan to keep your parents there, you’re going to save a lot on the annual expenses of care centers, where they may not be entirely happy. Here, with you to take care of them, they will be mentally at peace, which will add more healthy years to their lives. And if you plan on renting the unit out or use it as a home office, you will earn an extra income, thus monetizing your initial investment. 

Wrapping it up
So that’s how you should plan to build an ADU on your property. Following the aforementioned suggestions will not only save you hundreds of dollars on your project but also maximize the returns on your investment. 

A well-structured and well-equipped unit will attract potential occupants, who will be ready to pay you a good sum. Even if you plan to use the ADU for any other purpose, the more years it will survive without extensive repairs, the more money you will save.


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