Accessory dwelling unit (ADU) is an affordable housing option that solved the housing crisis many years ago, and today is an excellent opportunity to improve the quality of life and expand the living space. However, the most advantageous feature is that with the help of extra living space, homeowners can earn passive income. It does not matter whether they are owners of attached ADUs or stand-alone ADUs in the backyard home or granny flat format. In the case of rentals, you can not do without the help of professionals.
In this review, we will tell you how representatives of the property management company can help maximize income, why the list of landlord essentials in the issue of renting accessory dwelling units is unimaginable without qualified assistance, and how managers can create a high demand for your property.
Most ADU owners, no matter in what form, be it granny flats or garage conversions, naively believe that it will be enough to find a tenant, get money from him and continue a comfortable life, getting additional income. However, they are mistaken. The case of long-term or short-term rentals is very serious, and for a person who does not have special knowledge, it is impossible to successfully cope with it. In this situation, special real estate management companies come to the rescue.
The main advantage of such a company is that professional managers take all the tasks of renting out your ADU and further interaction with the tenant into their own hands. They also provide a wide range of services, from finding tenants and their feasibility study to resolving any technical and legal issues. Contacts with a property manager are necessary to ensure compliance with the lease terms, maximizing the income of the landlord, with his last participation in the management process.
Choosing a property management company is a very responsible step, so not to make a mistake, the landlord will have to analyze many factors.
Pay attention to the following characteristics:
Overall, when picking a real estate management company, do not be afraid to spend time searching because the more information you collect, the more successful the interaction will be. Your actions will pay off not only with a stable rental income but also with the peace of mind of you and your family.
In most cases, homeowners are busy people with a lot of work and family responsibilities. In this situation, it is physically impossible to keep the situation with rental living space under control 24/7. At this moment, property managers come to the fore because they will play the main role in the administration of rental property. These specialists will monitor all the nuances and resolve controversial issues, starting with technical and household issues and ending with negotiations with non-paying tenants and litigation.
If you decide to do business on your own, you may have to give up your main job, as it will take a lot of time, effort, energy, and nerves, and this is clearly not in the interests of rental property owners.
If the property investor decides to interact with the company, then he can expect not only good tenants but also a number of other equally important services:
The company ensures the legal peace of mind of the property owner and guarantees compliance with all legislative norms, ranging from the implementation of the Fair Housing Law to the requirements of local government.
Launch of the advertising campaign for existing space so that accessory dwelling units do not stand idle but bring income asap.
Homeowners need to be sure that their properties are reliably protected from various unpleasant situations and that the amount of insurance will be sufficient to resolve them.
Property owners are interested in cooperation with a company that can cover the maximum range of services because it is practical and profitable, and property management companies fully meet this criterion.
Long-term management involves constant reciprocal communication. It is beneficial to both the landlord and the company. The real estate manager regularly provides rental receipts, reports on the work done, and transmits requests from tenants and other information. The landlord, in turn, is interested in the condition of the property, the terms of rent, or the need to introduce additional services.
Active collaboration with a property management company minimizes misunderstandings and unpleasant situations, which positively affects the reputation of both parties.
To get the maximum benefit from cooperation with the company, the homeowner needs to carefully and in detail state his expectations. Any nuances are important, e.g., your wishes regarding whether smoking is allowed in a residential area or not. Also, it is necessary to say everything about financial costs; these may be payments for additional services.
The clearer you define your expectations, the more transparent the company’s activities will be, and the more productive the result will be.
There are several criteria by which homeowners can evaluate the effectiveness of a property manager’s performance:
The first thing that interests the homeowner is the condition of his property after the tenants have settled in. You can visit your accessory dwelling unit, and if you find any breakdowns or any damage, it will indicate the negligence of the property manager.
A good indicator of the company’s activity is that during the cooperation, you have never been disturbed by tax and municipal authorities, neighbors, or insurance agents. The responsible team always monitors the timely payment of taxes or settlement of disputes.
You can consider the work of the property manager effective if the rental lease terms regarding timely payments have not been violated at any time during the residence of the tenants.
All costs should be clearly spelled out in the contract. Every homeowner wants to get the maximum rental income with minimal costs, but separate living space is a kind of “organism,” and anything can happen. In this regard, we recommend discussing with your managers the issue of insurance, which will cover possible losses due to property damage and in case of any disputes.
The company’s task is to calculate all possible costs and risks to avoid unpleasant surprises.
Every property owner wants to get the most out of an investment in an ADU project and receive extra income regularly and without problems. However, even the most successful company cannot guarantee the absence of difficulties. Periodically, certain situations arise, and specialists need some time to solve them, e.g., when the company does not transfer the money because an unscrupulous tenant delays the payment.
Another example is a situation when you want to reduce the percentage of the manager’s remuneration, but he is not interested in it. Perhaps it makes sense to give in so as not to spoil the relationship because otherwise, your detached ADU will be idle indefinitely without tenants. In this regard, we recommend clarifying all these nuances in advance when signing a cooperation agreement, that is, to negotiate on the shore.
Everyone knows that all types of ADU, be it a basement apartment in a primary dwelling unit or a single-family house in the yard, not only increase the value of the property but also bring a stable income. However, if you choose to interact with property management companies, then specialists will strictly monitor the safety of your living space, advertise the object, conduct screenings for potential tenants, and draw up contracts. This all means that you can be sure that your ADU object will not lose its pristine appearance and will last for many years.
Accessory dwelling unit pros are difficult to overestimate because it is an ideal option for expanding existing property, solving intra-family issues of providing more freedom to adult children or accommodating an elderly family member. In addition, you can use ADU as a rental unit to generate passive income.
It is hard to name an exact number since it depends on many factors. However, we can say that you are more likely to get a large profit from a single-family ADU with a separate entrance than from an ADU which is attached to the main house. In any case, the investment that a person makes in building ADUs will pay off at the expense of rent.
In short, this is your protected passive income, more freedom for your favorite activities and entertainment in your existing home, harmony, and well-being. You continue your daily life, and the company stands guard over your investments.