As Denver's real estate prices continue to rise and investors search for new ways to maximize returns there has been an increasing mention of ADUs, and you may be wondering what they are.
ADU is an abbreviation for an accessory dwelling unit. ADUs tend to go by a more specific name that is used to describe the particular style that exists on a property. More familiar names for ADUs are carriage house, granny flat, mother-in-law suite, or backyard cottage. Each city has a different name for the units but the overarching description for an ADU is a detached secondary living quarter that is built on a single family home lot that contains sleeping, cooking, and sanitation provisions.
This 9 part course covers what you need to know about ADUs in Denver.
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Why do I give it away for free? One reason is that I genuinely enjoy creating content and teaching. It'll spark conversations and debates that I always learn from. Plus, the more I give, the more I get. Providing valuable information grows my network which increases deal flow and new clients. My goal is to make money from real estate investments and doing deals, not selling "how-to" information.
As Denver's real estate prices continue to rise and investors search for new ways to maximize returns there has been an increasing mention of ADUs and you may be wondering what they are. While they have been banned since the mid-1950s in Denver they are becoming more popular in surrounding cities as they open their zoning laws to accommodate the additional demand for housing.
This episode covers
- types of ADUs
- benefits of ADUs
- getting started with ADUs
- expected time frame
Module #2: ADU 101-Pre-Planning, Design, and Permitting
On this episode we start to scratch the surface of what it looks like to start weighing the options when it comes to thinking about building an ADU.
The thought of an ADU is an exciting prospect and there are many things to consider to get the process started of building one on your property. Before you put a for rent ad up on Craigslist there are some initial hurdles to clear before you can really start to make progress on getting an ADU built on your property. Most of the processes covered in this post are a time and financial commitment, but once you get past these parts the rest of the process should move much quicker and with less interference.
This episode covers:
- hidden hiccups
Module #3: ADU 202 - Other Considerations
By this point, we hope that you have a solid understanding of what it takes to get an ADU built on your property. The zoning and planning process requires a lot of input from the homeowner and multiple other professionals who will be assisting throughout the journey of the construction. We wanted to take some time to explain some other considerations that homeowner should have on their mind during the design and development process.
In this episode we discuss the nuances that should be considered when building an ADU that may be less evident to the average homeowner.
- what type of ADU do you want?
- what will the space be used for?
- taking the future into account
- the harsh realities of any building project
- pre-engagement recommendations
Module #4: ADU Financing and Appraisals
In this episode we discuss how you finance an ADU, and how much value they add to your property.
- thinking of this as an investment in the long term
- these provide unique opportunities to provide a safe investment
- ROI can vary on use
- we are seeing a big push in ADU development in hot real estate markets
- these markets have homes in them with lots of EQUITY
- affordable small unit shortages
- construction Refi
- stand alone second mortgage
- land loans
- appraisals are a challenge because they go off comps and there are not many comps
- appraisers don’t know how to appraise these new units
- Rent offset
Module #5: ADU Rental Value
Now that you've completed the process of getting your ADU approved, permitted, financed, and built its time to put together a plan to start earning your return on the investment. There are several different manners in which you can utilize your ADU for income and flexibility.
This episode discusses the following options:
- long term rental
- short term rental
- flex space
Module #6: Denver ADUs as Investments
Once an ADU is built there are many ways it can be utilized as an investment to build long term wealth. Every individual has a different preference for the way in which they like to get their return on investment and much of the variance has to do with how they plan on deploying the flexibility of the unit.
This episode dives into the financial benefits of long term rentals, short term rentals and mixed use.
Module #7: The Steps in Building ADUs
Though an ADU is a smaller version of a home they still require the same amount of permitting and construction to get completed. ADUs do face some unique challenges during their construction process. All projects are different but we outline the basic elements of the process you can expect to complete the construction of an ADU.
- initial steps and considerations
- exterior work
- interior work
- construction costs
Module #8: ADU Advocacy
As ADUs become commonplace among homeowners they will be frustrated if they are unable to build one because of a city's archaic zoning regulations. It is important that current and potential future ADU owners start working together to help make the changes that are needed for further expansion of ADUs.
In this episode, we discuss:
- Blueprint Denver
- local advocacy
- why we need ADUs
Module #9: The Future of ADUs
Blueprint Denver went was put to a vote... and it passed! This is excellent news and will help the future accessibility of ADUs. The goals are far from completed but an important first step has been taken and is supported by the residents of Denver.
This episode covers ADU case studies and the future of ADUs.
- Contact Jeff Baker at email@example.com
- ADU meetup - https://www.meetup.com/Colorado-ADU-Backyard-Property-Investors/
- ADU4U website - http://youradu.com
Three Ways to Learn
You're probably like me. You're busy, can't spend hours watching videos on your computer, and bounce around between computers, iPads, and iPhones to consume content. I'm presenting this course in three different formats:
- Listen to the podcast (player at the top.)
- Watch the YouTube video (at the bottom.)
- Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.
All three mediums should have the same format and flow. If you're listening to a podcast but want the details on the numbers discussed, then check the show notes, and go to the blog for all the details!
If you have any questions, please reach out or leave them in the comments!