HUD Articles

This is one of many articles we will be writing regarding investing in Real Estate.  Today we’ll be looking at another form of househacking.  Looking for homes specifically with a dedicated in-law suite or Accessory Dwelling Unit (ADU).

In-Law suites have been around forever.  The idea behind them is having a family member (usually elderly) live in the same home but in an independent way.  They have their own kitchen, bath, bedroom, living area and a dedicated entry away from the main home.  These areas are usually a basement, but occasionally they are in the from of an entirely dedicated unit attached to the home (ADU).  Banks and financial institutions don’t classify these types of properties as “duplexes” so you can take advantage of the owner occupied financing rules when you purchase.   Because they have dedicated separate entrances from the main home, you can easily rent out these areas and take advantage of cash flow on your own property and still maintain a separation of privacy you can’t get when you have to share common areas such as kitchens and living space.   Also, because the area you are renting out contains a private kitchen, bath and living space, you can chare far more vs. just renting out a bedroom.