For most of us, our home is the most significant asset we own. When money is needed for important life expenses like college tuition, medical bills or paying down high-interest debt, our home becomes a bank.
Refinancing has been the go-to vehicle for taking money out of our homes. However, with interest rates on the rise, refinancing is not as fiscally advantageous. Even if you don’t have a specific expense to cover, you may just want to generate extra income as the cost of living rises.
Instead of waiting for interest rates to drop or taking on a second job, you could generate income from your current home. Welcome to the wonderful world of ADUs.
ADU stands for Accessory Dwelling Unit and is considered a smaller, independent residential dwelling unit located on the same lot as a stand-alone single family home. An ADU can either be attached (e.g. converted garage) or detached. If the ADU is detached, there are specific criteria (e.g. dwelling height, set-back distance from property line) to qualify it as such.
To fund the conversion or construction, homeowners can acquire a private-money loan or HELOC (home equity line of credit) which we would be able to help with. The turnaround time for accessing the funds is typically 2 weeks or less after receiving all loan documentation.
ADUs are great as long-term rental units or to use as Airbnbs. While there is an initial investment, you could quickly and easily generate extra income in perpetuity.
To find out more about your ADU options, contact your Forbix team member directly or email us at firstname.lastname@example.org.
Photo from Action ADU