Accessory Dwelling Units (ADUs) is a complicated term for something pretty simple. ADUs are secondary living structures that are separated from the main house. Some examples of ADUs are mother-in-law suites, carriage houses, casitas, and garage or basement apartments. The criteria of an ADU is that it is a self-contained living space that must contain a bathroom, kitchen, and sleeping area. ADUs must have their own separate address, but they cannot be sold separately from the home because they are considered a part of the home property.
Regulations apply to these additions whether ADUs are being occupied for personal use or renting them out. If you are considering building an ADU or purchasing a property with an ADU, it is vital to know your location's zoning laws, permit costs, and tax implications. Each municipality is different, so you will need to research the regulations specific to where your ADU is located.
Renting out an ADU comes with additional regulations and other things you need to consider. In the next couple of weeks, Chadwick’s Real Tips will discuss ADU rental obligations and insights that make transitioning an ADU into a rental property a little easier.