The Pros and Cons of Accessory Dwelling Units
ADU’s can provide a homeowner with extra income.
Mother in Law apartments, student studios, caregiver quarters, or whatever you name them, “Accessory Dwelling Units,” ADUs, those separate living spaces attached to your main house, or on the same lot, are becoming more popular all the time. But, before you dive into converting your attic, basement or garage into an apartment, there are things to know.
The Pros
In Bellingham, ADUs are especially in demand, partially because of the shortage of affordable housing and the lack of buildable space left in the city. By building extra bedrooms, homeowners can increase their income while creating living space for those who are not able to afford the high cost of a regular apartment, or even keep their families close without intruding on each other’s spaces.
ADU’s also offer a homeowner extra income at a time when many could really use it, to pay rising taxes, supplement retirement, or even generate some money for travel or a child’s college education. They can be a great way to utilize rarely used space in your home without a major remodel. The addition of a residential unit becomes a permanent part of your home, also increasing your value over time.
They may help you “age in place”, as you need to bring someone into your home. Ninety-three year-old wheelchair bound Lillian turned her basement into an apartment for her live-in caregiver. It has allowed her to stay in her home and rely less on her busy children for daily care. Eighty-nine year-old Genny, moved into an apartment in her son’s home, enjoying family interactions when she chooses, and privacy when she doesn’t.
The apartments have multiple uses that, for you, might change over time. Bellingham is a college town, with thousands of students at WWU, BTC and WCC seeking affordable housing. Some homeowners have created spaces for grown children who have returned to the nest after college. James moved into his sister’s basement apartment after a divorce. The time there helped him save money and get him back on his feet.
The Cons
If the extra unit is occupied by a family member or caregiver, management is usually not an issue. Communication about maintenance, rent collection, damage deposits, pets, noise and visitors, might be easily resolved. In some cases, though, hiring a property management company can save a lot of headaches.
Renting to students or other strangers can bring on issues you may not have thought of. Pre-qualifying renters is an important part of the process. Chances are, if you’re new to management, you don’t have access to applicant credit ratings or past rental history. Creating an appropriate contract may be really important later if you have to evict someone, and emotions can get in the way of doing business.
Professional property management companies can take care of things if you travel a lot. You don’t want a 3 AM call in Hawaii that the hot water heater just flooded. A good, reputable company will have a 24-hour response team that can show up and fix the problem. They will make sure the rent is paid. Property managers are paid a percentage of the rent.
The Laws
Before making a decision to alter your home, do some research on regulations. If you want to further understand the role of a rental management company, talk to a couple of them. Be sure to choose a company that has been in business awhile and understands the local market.
Here are a few things to note:
- The City of Bellingham allows attached and detached ADUs in most residential zoned areas.
- You must apply for a permit from the City.
- The home and the ADU must be owned by the same person, and the owner must live on site.
- The ADU must have no more than two bedrooms and not exceed 66% of the gross square footage of the residence.
- Parking space must be provided on site unless you receive a parking waiver from the City.
- Utilities must comply with City codes and there are specific regulations to follow.
The City of Bellingham has an excellent page on ADU’s on their website at https://www.cob.org/services/planning/development/pages/adu-ordinance-updates.aspx.
by Doug Wight, owner Windermere Property Management
