There’s no doubt about the fact that the housing industry has been short of supply and costs fluctuating as a result of the Coronavirus pandemic. Home prices skyrocketed as the country faced lockdown because Americans sought homes with larger spaces that they could convert into office spaces.
Even as the Coronavirus subsidies, house prices in the market continue to rise, keeping out buyers. Now, rental demands has even gone up, leaving tenants and homebuyers with fewer options for renting or buying a home.
Typically, renting a home is less expensive than owning a home, but the pandemic might have done more harm than good to housing with the current demand. Investors see this as a chance to make some profits – which they were denied while the pandemic occurred.
Homeowners Are Turning Their Spare Spaces Into New Homes
As the unstable housing market drama in the United States continues with the growing demand, several houseowners are converting the extra spaces they have in garages into guest house and garage houses for rent.
Freddie Mac says that homeowners are now adding ADUs, to the same area as single-family homes to earn extra income from renting. This is a bid to meet the ever-growing demand and maximize supply.
Maxable CEO Caitlin Bigelow affirmed that homeowners are now looking at ADU as “low-hanging fruit” when asked about the current housing industry situation. Caitlin states that everyone is in a tremendous home crisis with no date of where it would end.
Amy O’Dorisio, a 40-year old Residential Realtor in 2018, converted a single space in a garage into a bedroom unit with a single bathroom. O’Dorisio said she had predicted that demand for houses, especially ADUs would ensue one day in San Diego. Luckily for her, she wasn’t mistaking.
The Residential Realtor said she used over a hundred thousand dollars converting the garage space, doing some permits, and upgrading pieces of the furniture. Currently, she rents the unit for approximately two thousand dollars a month and is working on turning different space in her property into an ADU. O’Dorisio said her goal is to maximize profits from home rentals to the extent that she never has to do a 9-5 job as before.
The real estate industry has become the most favored way for investors to profit over a long period, especially as home prices are rising and mortgage rates are relatively low. The low supply and availability of affordable houses are pushing more cities to welcome the ADU-style idea. But, you have to examine some factors before adopting the style.
For beginners, you must check if converting your spaces to homes is permitted or in line with the city’s jurisdiction. Next is to consider the budget. Converting spare spaces into rentals costs a lot, almost like buying a brand new home. Constructing stand-alone buildings is even more expensive.
If you build for later rent or sale, you need to consider the location and estimate the timeline; that is knowing if the property will rise than anticipated in the upcoming years. Otherwise, you should opt for rental income.
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The Power Is Now Media is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, and is headquartered in Riverside, California. We are advocates for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. The Power Is Now Media corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website: www.thepowerisnow.com.
Published by Eric Lawrence Frazier MBA.
