 Accessory dwelling units (ADUs) also referred to as secondary dwelling units, casitas, or granny flats are fully habitable homes that accompany a primary residence on a lot. In Austin, these have become quite popular as a result of the City of Austin loosening regulations on their construction. You can read all about the exact regulations in my earlier post, Navigating the Accessory Dwelling Unit Process in Austin. ADUs are a great opportunity for investors to maximize their rental rates on a buy and hold property, homeowners to earn supplemental income through an on-site rental property, and developers to purchase one property and then sell two units.  For buy and hold investors, the ADU makes economic sense. As home prices soar in Austin, it’s become more challenging to find income producing properties with rental rates that justify the asking price. For example, a $300,000 home with a $2,000 market rent is an ok investment. If you put 20% down, your monthly payments will likely be less than the monthly rent you receive. However, the margins are close - adding in leasing expenses, repairs, and vacancy loss, -you may only be breaking even or losing money. Now, if this same property has a detached garage that you could convert to an ADU for $100,000 you have a much better investment. You could even do the rehab using a FHA 203k or Conventional Homestyle loan which combines the ADU project with the primary home purchase into a single mortgage loan. Homeowners can also utilize the FHA 203k or Conventional Homestyle Loan by coupling their accessory dwelling unit costs with a refi on their primary residence. The new accessory dwelling unit could be used for a family member to live in hence the term “granny flat”. Alternatively, a homeowner could utilize the ADU as a long term rental to offset mortgage payments. Developers are loving the ADU regulations in Austin. Most commonly you are seeing developers purchase a home or lot and then build two new units on the lot. The lot is not legally subdivided; rather, they do a condo regime in order to then sell both units separately. This practice is quite common in the following Austin zip codes: 78704, 78745, and 78702.  Identifying properties with the ability to have two homes on one lot in Austin is somewhat challenging. There is no easy way to search for homes for sale with ADUs in the Austin Board of REALTORS’ MLS. Luckily, I’ve identified a few properties with ADU potential. These properties either already have an ADU, have an existing structure that could be converted to an ADU or are located on a lot with secondary dwelling unit potential.
5002 Balcones Dr. Austin, TX 78731 911 Payne Ave. Austin, TX 78757 11705 Pollyanna Ave. Austin, TX 78753 6302 Brookside Dr. Austin, TX 78723 4202 Bradwood Rd. Austin, TX 78722 2301 S 3rd St. Austin, TX 78704 200 Ainsworth St. Austin, TX 78745 1309 Green Forest Dr. Austin, TX 78745 1209 Austin Highlands Blvd. Austin, TX 78745 4506 S. 1st St. Austin, TX 78745 2407 Cecil Dr. Austin, TX 78744 4402 Hayride Ln. Austin, TX 78744 1526 FM 1105 Georgetown, TX 78626 3018 Ranch Road 1869 Liberty Hill, TX 78642 2317 N Shields Dr. Austin, TX 78727 8601 High Valley Rd. Austin, TX 78737 If you are looking for a property with ADU potential, contact me today. I can help simplify the process of finding the appropriate property for sale in Austin.
21 Comments
6/26/2022 11:50:54 pm
Thank you for sharing your blog. Keep on posting. 8/16/2024 12:35:24 pm
The idea of converting a detached garage into an ADU is brilliant! It’s a smart investment move, especially in a market like Austin where property prices are soaring. Great to know about the financing options too! If you need any driveway services to complement your ADU project, feel free to visit our site. 8/20/2024 09:31:39 am
This article on ADUs is incredibly insightful! I hadn’t realized how effective they can be for boosting rental income and maximizing property value. If you’re also considering enhancing your property’s curb appeal, don’t forget to explore our driveway solutions on our site! 8/30/2024 07:12:15 am
The flexibility ADUs offer for homeowners and developers is amazing! They really maximize the potential of a lot. If you're thinking of enhancing your landscape to complement your ADU, visit our site for top-notch Tree Surgery. 10/11/2024 11:34:36 am
This is such a fascinating article! The flexibility and income potential of ADUs is impressive. It's great to see Austin loosening regulations to support this. Don’t forget, if you're building or renovating, we can help with driveway solutions to complete the project. 10/11/2024 11:43:35 am
Wow, the possibilities with ADUs in Austin are endless! Whether it’s for extra income or family, these units are such a great idea. If you're thinking of building or expanding, let us take care of your driveway needs—visit our site! 10/15/2024 09:46:00 pm
I love how ADUs can help both investors and homeowners! The idea of using an FHA 203k loan to create a 'granny flat' or rental space is brilliant! If you happen to need driveway services, feel free to visit our site! 10/15/2024 09:51:04 pm
I appreciate the clarity in explaining how ADUs can maximise rental rates! It's refreshing to see such practical advice for homeowners and investors alike. If you happen to need driveway services, feel free to visit our site! 10/23/2024 09:26:13 am
This article perfectly explains how ADUs can benefit both investors and homeowners! Austin’s regulations make it a great place for these. If you’re planning to add an ADU and want to revamp your driveway too, check out our services! 10/23/2024 09:28:50 am
ADUs are such a fantastic option for homeowners wanting extra income or space for family. Plus, combining the project with a refi is a smart move. Don’t forget, if you need driveway services to complete your renovation, visit our site! 11/8/2024 04:37:09 am
Love seeing how ADUs are growing in Austin! They offer so much flexibility for homeowners, from rental income to housing family members. Thanks for the insight! If you need driveway services for your new ADU, don’t forget to check out our site! 11/23/2024 11:52:28 pm
This article made me realize how valuable ADUs can be in today’s market. The potential for creating extra rental income or space for family is such a smart move. 11/23/2024 11:54:03 pm
I never knew how much ADUs could change the game for investors and homeowners. If you happen to need driveway services for your ADU or property, feel free to visit our site! 12/4/2024 10:35:02 am
This is a fantastic overview of how ADUs can boost property values and income! I love how adaptable they are for different needs. If you need any driveway services during your ADU project, feel free to visit our site! 12/18/2024 03:00:23 am
I didn’t realise how much potential ADUs have for both investors and homeowners. The breakdown here is fantastic! By the way, if you’re looking for block paving or driveway solutions, check out our services! 12/27/2024 08:14:22 am
This article really highlights how ADUs are a game changer for investors and homeowners alike! I love how it showcases the potential for maximising rental income. If you're thinking about upgrading your driveway for your ADU, feel free to visit our site! 1/3/2025 09:37:01 am
Such a great strategy for both homeowners and investors to boost their property's income potential! If you're upgrading your property with an ADU, don’t forget your driveway – visit our site for expert solutions! 1/3/2025 09:37:57 am
ADUs are definitely a smart investment in areas like Austin. I can see how they can really boost property value. If you need a driveway solution for your project, feel free to visit our site! 1/8/2025 03:41:47 am
Great insight into maximizing property value in Austin! The idea of having two homes on one lot is a smart way to increase rental income and overall investment potential. Definitely a strategy worth considering for anyone looking to make the most out of their property. Leave a Reply. |