Value of an ADU vs renovations to join ADU + SFR

I have a SFR investment property with an ADU above a 2 car garage so that the 2 car garage is not accessible to the main part of the house. In my town, there’s an owner occupancy requirement so that I cannot rent out the ADU and SFR separately to two parties. I would have to live in either the ADU or SFR. Since I cannot rent the ADU out separately (vacant now), would it boost value for buyers to gut the ADU and make renovations to connect the two units?

I live in a moderately HCOL area where there aren’t a lot of homes with ADUs, so I feel like most buyers would not be interested in being a landlord although financially it would go a long way for a buyer to rent out the ADU and offset the mortgage significantly given the price of rent here.

The other thing I was thinking of was asking the housing board for an exemption to the owner occupancy rule, but then I would put a target on my back and they would know that I was trying to rent the ADU without living in the SFR. I have 40% LTV in the house, so doing a cash-out refi down the road and renting units has been something on my mind.

Thank you.

submitted by /u/Landlubber420
[link] [comments]

I have a SFR investment property with an ADU above a 2 car garage so that the 2 car garage is not accessible to the main part of the house. In my town, there’s an owner occupancy requirement so that I cannot rent out the ADU and SFR separately to two parties. I would have to live in either the ADU or SFR. Since I cannot rent the ADU out separately (vacant now), would it boost value for buyers to gut the ADU and make renovations to connect the two units? I live in a moderately HCOL area where there aren’t a lot of homes with ADUs, so I feel like most buyers would not be interested in being a landlord although financially it would go a long way for a buyer to rent out the ADU and offset the mortgage significantly given the price of rent here. The other thing I was thinking of was asking the housing board for an exemption to the owner occupancy rule, but then I would put a target on my back and they would know that I was trying to rent the ADU without living in the SFR. I have 40% LTV in the house, so doing a cash-out refi down the road and renting units has been something on my mind. Thank you. submitted by /u/Landlubber420 [link] [comments]

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