Accessory Dwelling Unit (ADU)
Categories: Real Estate, Investing
It started out as just a closet. A place to keep warm in the cold winter nights. But the developer, wanting to charge more than $10/week for rent, put into the closet a contiguous room that had its own kitchen, living room, and entrance into the hallway of the primary house.
An ADU exists as a stand-alone, rentable unit that draws resources like gas, electric, and water, from the main house. Why the distinction? Because the vagaries of renting a room in one's house became difficult for everyone from the IRS to the renting community to figure out where boundaries should lie. As part of the process of dealing with the masses needing inexpensive housing alternatives, ADUs became a kind of unit currency, or unit product, on their own, so that the market was liquid and easily defined...especially for the Air BnB crowd.
