An Alameda Rental ADU Case Study
- WHO: Kelly A., Bay Area high school math teacher
- WHAT: Built a one bedroom, one bath backyard cottage
- WHY: To improve her property value and earn supplemental income
As a high school math teacher, you can imagine Kelly A. is pretty good with numbers. That’s why when she started researching the possibilities of expanding her 1908 British style Alameda home to increase her property value and gain more space, she quickly pivoted to exploring the possibility of adding a rental (ADU) instead.
Kelly originally purchased her primary two bedroom, one bath, 1,200 square foot home on the west end of Alameda in 2012. The arrival of her son a few years later got her thinking about how to use her home and property more effectively. With some internet research, she stumbled upon the possibilities of adding a rental ADU in her backyard. She thought not only could this increase the property value, but may even give her an additional income stream as well. That’s when she found Alameda Tiny Homes; the ADU design, permitting, and building company that works exclusively on the historic island of Alameda.
Kelly contacted Alameda Tiny Homes’ owner Hank Hernandez first to explore her options. Hank was able to look at her property online before they even met to determine which of their ADU designs would work in her narrow backyard, and still suit her needs. As he does with all their designs, his team could even customize it to match the style of her main house and her personal preferences.
Kelly’s project moved quickly from there and she looked no further. She loved that Alameda Tiny Homes works exclusively in her city, which meant Hank and his team knew the nuances of working with Alameda’s strict permitting process and local building codes. She also knew that once her ADU was approved by the city, the construction phase would be smooth and efficient with a local company.
From there, Kelly got a home appraisal and looked at the numbers of refinancing her home to pull equity out to pay for her backyard cottage, and cover the cost of some repairs and upgrades to her primary home. She compared this with average rental prices in her area. When she laid it all out in front of her Kelly said, “The finances just made sense. As a math teacher, I can tell you all I could think of was why WOULDN’T I do it?”
“The finances just made sense… all I could think of was why WOULDN’T I do it?”
Initially, Kelly intended to move herself and her son into the backyard cottage while he was small and to rent her front house to capitalize on the larger square footage for more income. With Hank’s counsel, she chose Alameda Tiny Homes’ Webster, one bedroom, one bath ADU, working with him to customize the design to match her needs. She liked the L-shaped footprint and had Hank’s team add a private patio area and landscaping.
The world had other plans however when the pandemic hit in the middle of her build. Kelly now needed her larger space in her front home to accommodate both a home office and play space for her four year old when we were all trapped at home. But as luck would have it, one of her previous high school math students was in search of her first apartment after graduating from the police academy. Kelly now had a trusted tenant for her rental ADU whom she knew and loved.
When it was all said and done, Kelly is thrilled to share that her ADU improved her property value as hoped. Not only that, but even with a higher mortgage payment, the expense is offset by her rental income meaning she actually pays less each month than she had before she built her backyard cottage.
“She actually pays less each month than she had before she built her tiny home.”
Kelly is effusive about her choice to build her backyard cottage with Alameda Tiny Homes. In the future, she feels good about the potential to have her parents move-into it so she can help them age in place and avoid assisted living. Even further down the road, when her son moves out on his own, she considers she may go back to her original plan and move in the ADU herself and rent her front house, helping her to realize even greater supplemental income as she heads towards her own retirement plan.
Are you thinking of building an accessory dwelling unit in Alameda? The experts at Alameda Tiny Homes know what it takes and can answer all your questions. You could have an ADU in your backyard in as little as 90 days!
