Phase Seven
Renting & Move-in
- Understand what it takes to rent out your ADU
- Consider affordable pricing for your unit
- Make a long-term plan for the care and upkeep of your ADU
Timeline
Most ADU projects take 12-18 months to complete, but some extend to 24 months or more.
FAQs
Here are a few of the most frequently asked questions about renting and move-in. See the content below for more guidance, resources, and tips for all steps of the process.
What do I need to know about becoming a landlord?
Renting an ADU comes with many responsibilities, including understanding local and state housing laws, executing a lease, finding and managing a tenant, and maintaining a rental property. It’s important to understand the laws as they may affect things like future rent increases, changing use over time, evicting tenants, and moving family into the unit. See the Renting & Move-In steps for resources on understanding rental laws, tenants’ rights, and more, and our Worksheets for help with your lease terms.
When is my ADU ready for move-in?
As soon as the final inspection is complete, your ADU is ready for move-in! Make sure utility services are set up, an address is established, and other preparations are in place. See the Renting & Move-in guide for more responsibilities of being a landlord.
What about the money I could make renting the ADU?
Rental income is a major benefit of having an ADU or JADU on your property – for many people, it provides flexibility in their budget or an opportunity to grow their savings. Remember you can’t do short-term rentals with your ADU.
Make sure to consider potential income when planning the finances for your project.
Can I rent my ADU as an AirBnB or other short-term rental?
No. ADUs and JADUs cannot be rented for fewer than 30 days at a time.
Step by Step
Renting Your ADU
Before you begin Confirm the new street address for your ADU with your city or county staff. You’ll need this street address to establish utility services and to set up your lease.
Renting
Step 1
Complete PreLiminary steps
Prepare to rent your unit by getting insurance, setting up utilities, and developing a plan to handle the finances.
Renting
Step 2
Understand rental laws
You will need to understand all the laws related to being a landlord, especially around discrimination. For an overview of California laws that regulate certain aspects of the rental housing market, review California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities, published by the California Department of Consumer Affairs. You should also talk to city staff about regulations that might apply
Key Resources
Renting
Step 3
Set the rent
Maximizing the rent is often not the only consideration – setting a fair rent a bit under market rate will help you attract and keep good tenants. Consider pricing your unit so that it is affordable for the local workforce and families who may not be able to afford high rents in the city. A unit is considered affordable if a household is paying less than one-third of their income on their housing costs.
Many homeowners are motivated to rent their ADU affordably to community members because they serve essential roles and often have difficulty finding housing that meets their needs. If you financed your construction with a loan, consider the loan length, interest rate and any reserve funds you have as well.
Renting
Step 4
Write YOUR LEASE
You will need to create a lease (or rental agreement if renting month-to-month) for both you and the tenant to sign. This agreement should clearly identify all the expectations for you and your future tenant. Even if you are renting to a friend or family member, creating an agreement is always a good idea to avoid possible confusion or conflict. Sample agreements can be found online, and you can use our What You Want In Your Lease worksheet to help.
Key Resources
Renting
Step 5
Find a tenant
Research how to successfully advertise your ADU and select a good tenant. Along with word of mouth or posting your rental online, you can also contact nearby schools, faith communities, or other similar locations to see if any teachers, staff, or community members are looking for housing. You can also post a rental listing on Craigslist or Zillow, share your listing with Facebook or Nextdoor group pages about housing in your area.
Once you select a tenant, collect a security deposit and first month’s rent when you sign the lease. Conducting a move-in inspection with your tenant is also a good idea.
Key Resources
Renting
Step 5
Manage your rental UNIT
Think through a long-term plan for the care and upkeep of your ADU, how shared responsibilities will be split, and how to address any issues that might occur with your tenant.
Other issues to consider:
- Maintenance: According to state law, it is your responsibility as a landlord to maintain a “habitable” ADU, and note that you’ll need to give your tenant(s) 24 hours’ notice before you or maintenance providers can enter the unit.
- Rent increases: Make sure you understand the rules about increasing the rent – California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities is a good resource.
- Eviction: Hopefully you and your tenant(s) will not have problems, but if problems do arise that cannot be resolved, you will need to consider eviction. It’s recommended that you work with a lawyer if eviction is necessary. State law mandates a judicial eviction process, which is best handled by a lawyer.
Key Resources
