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7 Common Questions About An ADU



|Last Updated: 26 Jul 2022

Let's go over some of the most frequently asked questions regarding ADU construction, rentals, costs, and building codes.


1. Where can I find affordable housing in the Bay Area?

If you're specifically searching for one-bedroom houses, Vallejo, San Pablo, Concord, San Jose, Alameda, Dublin, and Walnut Creek cities might be the ones you're looking for, and here's why:


  • ​​​Vallejo - Aside from being the largest city in Solano County, Vallejo is the most affordable city in the Bay Area. Here you can visit the highly acclaimed amusement park of the city, Six Flags Discovery Kingdom. 


  • San Pablo - Nestled in West Contra Costa, this is one of the oldest Spanish settlements in the region. It is known for its emerging residential and business community and it boasts a few popular spots such as Tiden Regional Park, Kennedy Grove Regional Recreation Area and San Pablo Reservoir.


  • Concord - In this city, you'll enjoy a wide range of amenities, from shopping centers and farmers' markets to historical areas and hiking trails.


  • San Jose - It's just one of the most budget-friendly areas to live near Silicon Valley. Moreover, it's also considered one of the largest tech hubs in the area.


  • Alameda - This city is one of the most amazing places to live in. It offers a great fusion of suburban and urban areas. Some of the sought-after tourist spots here include the Pacific Pinball Museum, Robert W. Crown Memorial State Beach, and the USS Hornet - Sea, Air, and Space Museum.


  • Dublin - It's been known for its thriving housing community. It has a pleasant climate all year-round and boasts a range of outdoor tourist destinations that are not limited to steep canyons, beautiful parks, and lush biking trails.


  • Walnut Creek - Another great city you can choose if you're looking for an affordable housing option. Located in the East Bay, you can easily access some of the major cities like San Francisco, Sacramento, Oakland, and San Jose. The city is also known for its cultural attractions, first-class shops, entertainment venues, and beautiful parks.


2. What is a good rate of return on a rental property?

The most ideal rental yield or average return on investment (ROI) percentage is above 15%. For most real estate experts, 10% is already a good percentage but there are rental properties that yield 12% or higher and this rate is considered to be the highest ROI a homeowner could have.


3. What would be the cost of building a 1000-square-foot house in California?

There are various costs per county and city in California. The most affordable price per square-footage would be $160 and these are homes built in the American Canyon city. So for a 1,000-square-foot house, it would only cost $160,000 to build one. Meanwhile, for luxurious cities like San Francisco (District 8), square footage would be $1,476 and so building a 1,000-square-foot home would cost you a whopping $1,460,000.


4. In Los Angeles, can you convert a shed into a tiny home?

Most of the time, the answer would be yes. It is always better to check with your local building department first and inquire about all the questions you have in mind before breaking ground. Rules have definitely changed because, in the past, homeowners couldn't place additional homes on R1 zoned properties (single-family residence). There may be areas in LA that still prohibit it so it is best to know all the requirements beforehand.


5. Can you build a house in your backyard?

The answer is yes. This is where accessory dwelling units (ADU) are usually built (or placed depending on which type of ADU you're having). This dwelling option has been resolving the housing crisis, particularly in California though ordinances and regulations vary per city.


6. Which counties or states have lenient building codes?

Here are the counties and states that have few or no building codes at all:

  • Arcosanti Urban Laboratory, Arizona

  • Brewster County, Texas

  • Delta County, Colorado

  • Marfa County, Texas

  • Miller County, Missouri

  • Montezuma County, Colorado

  • Terlingua, Texas

  • Wonder Valley, California

7. What are the most expensive parts of building a house?

Building a house from the ground-up would definitely cost you a huge chunk of money. What would make the budget increase are some of the construction parts while building the house and these are:


  • Interior Finishes and these include countertops, cabinets, doors, trims, flooring, lighting, painting, drywall installation, insulation, appliances, plumbing fixtures, fireplace, and mirrors. The average cost of these essential home elements would be $68,000.


  • Framing would be the next expensive part of building a house and this will be highly dependent on the materials and the size of your home. With an average custom home, the budget for framing would be around $41,000.


  • Finished lot costs, let's say your overall budget for your home is $428,000, a whopping $190,000 goes only to the finished lot cost.


  • Major systems, your electricity, your plumbing, and your home HVAC are considered your house's major systems. These are an integral part of your home and you should prepare to have at least $11,000 for these.


  • Exterior Finishes, this part would also require a lot of materials as this would hole the overall structure of your house. These are your exterior walls, garage, doorways, openings for your windows and the list goes on. This would also include your roof as well so better keep enough budget for that too!
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