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Build to Rent ADUs

Building to rent is a growing trend among families seeking extra income. Even better, you don’t need to build a whole other house to do so.

Accessory dwelling units, or ADUs, are an excellent solution to building a rental space while increasing your home’s value. They are also easier to maintain and manage than a separate building.

Discover how renting an ADU on your own property captures additional income and how to rent one out successfully.

What is an ADU?

An ADU is an accessory dwelling unit. It’s a secondary housing unit usually disconnected from the main house and features standard home elements, such as a kitchen, common space, laundry facilities, and a full bathroom. On the surface, one may assume an ADU is another name for “tiny home,” but they have several differences.

The growth of the tiny home movement is partially due to the ability to rent it out as a separate unit on your lot without having to share space. However, while ADUs and tiny homes can be used as rentals and are comparable in size, that’s where the similarities end.

Tiny homes lack basic utilities. They must connect to the main house to have running water and electricity. ADUs, however, don’t need to be connected to your property to have basic utilities. They offer the comforts of home on a smaller scale than the main house.

How Do You Start an ADU Rental Property?

Building an ADU as a rental property has a great potential to earn extra income. But before looking for tenants, it’s essential to be familiar with any local ADU and rental regulations and have a plan for how to rent it out.

To help homeowners interested in building a rental ADU property, here are some tips and steps to successfully do it:

Check Local Regulations

Before renting out your ADU, check with your local government to ensure that it is compliant with local zoning and building codes so to avoid potential legal issues down the road.

Consider the Duration of Lease

When building an ADU as a rental space, you’ll want to think about the duration of the rent. You may want to rent it long-term or short-term, as these are legal terms and can differ between cities.

For example, in Washington, a long-term rental is typically defined as a lease for 30 days or more, while a short-term rental is generally defined as a lease for less than 30 days. Whereas in Oregon, the minimum lease period is 45 days. ADUs can not be rented overnight.

Know the Landlord-Tenant Laws

While there are no specific state regulations for renting long-term ADUs on private residential lots, landlords must comply with state landlord-tenant laws, like security deposits, evictions, and habitability standards.

For short-term rentals, specific regulations apply to ADUs on private residential lots with homes and typically require a short-term rental permit, restrictions on the number of days you can rent the space, and payment of local taxes.

Determine Rental Rate

Research the rental rates of ADUs and similarly sized spaces in your area. Be sure to include any additional expenses, such as extra utilities and maintenance costs in your rental rate.

Create a Rental Agreement

Before looking for a tenant, you should make a rental agreement outlining the lease terms. The contract should include the rental rate, payment schedule, and maintenance responsibilities. In addition, it must clearly outline the tenant/landlord relationship and the duties of each party. Consulting an attorney can help in creating a rental contract.

Screen Potential Tenants

Before renting out your ADU, screen any potential tenants by running background and credit checks, verifying employment, and checking references.

Maintain the Property

As a landlord, you are responsible for property maintenance and making any necessary repairs promptly. Doing so helps keep your tenant happy and ensures that your rental ADU remains in good condition.

Floor Plans Ideal for ADU Rentals

We at HiLine Homes offer several floor plans that make for an ideal ADU rental and invite you to explore which ones best suit you:

Starting at $137,995 $137,995 $137,995 $137,995 $144,995 $137,994 $192,995-$248,995 $138,995 $140,995 $132,995 $137,995 $137,995 $129,995 $149,995 $137,995 $137,995

Starting at $103,995 $97,995 $103,995 $103,995 $109,995 $103,995 $143,995-$196,995 $102,995 $99,995 $94,995 $103,995 $103,995 $97,995 $118,995 $103,995 $103,995

Building an ADU with HiLine Homes

For nearly 30 years, we have successfully used the “on your lot” building program to develop a construction process that streamlines building ADUs. Your expert HiLine Homes Home Consultant will guide you through every step.

We realize securing financing can be one of the most stressful parts of building an ADU. However, with our approved lenders, you can find the best financing solutions to build an ADU on your existing property.

Need help on where to start? Contact us to get rolling on building an ADU to rent!

Contact your local HiLine Homes office to speak with a knowledgeable Home Consultant about our home building process. If financing is needed, be sure to ask about our approved lenders, whether you need to purchase land or not.