Madison Builder

Value

Owner Economics

Given residential real estate values in Southern California, building an ADU to add square feet, makes perfect economic sense. The cost to build an ADU averages only half the ultimate value created at resale, assuming today’s real estate prices. These prices are likely to only go one way, creating long term value in the decision to build an ADU.

The potential rental income generated from an ADU could pay the entire cost of the investment in as little as 4 years in terms of rental income generated. In addition, financing the cost of an ADU with your bank or lender, could allow you to take additional cash for other purposes or lower your Loan to Value, which could lead to lower overall mortgage rates.

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