An ADU that pays for itself
Turn unused yard space into a permitted rental. Here is what it costs, what it earns, and the rules that make the arithmetic work.
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The numbers
A 500 sq ft detached unit, standard finish, from the same model as our calculator. Change every assumption in the calculator →
500 sq ft detached, standard finish, including design, engineering and construction.
Fully financed at 7.75% over 20 years.
Above this the unit pays its own way, after the same reserves.
What makes a good rental unit
Its own entrance and meter
Separate utilities cost more up front and make billing a tenant simple for the next twenty years. Decide it deliberately.
One bedroom over a studio
In this market a separate bedroom widens the tenant pool more than it adds to the build. Plan One is the usual answer.
More →A tenant, placed
Bayfront holds a DRE broker licence, so when the unit is done we can place the tenant rather than hand you to an outside agent.
More →The rules that matter here
State law, which no city can go under. Full guide →
No owner-occupancy rule
A city cannot require you to live on the property to rent out a standard ADU.
No impact fees under 750 sq ft
Prohibited below 750 square feet, proportional above it.
30-day minimum stays
An ADU permitted after 2020 is for rentals of 30 days or more in most cities; short-term rental is usually barred.
Two units from one lot
Most single-family lots can add a detached ADU and a JADU. The JADU carries its own rules.
Plans that fit
Questions this comes with
From the 2026 HCD handbook. All answers →
Do I have to live on the property?
For an ADU, no. A city cannot impose an owner-occupancy requirement on an ADU. The old sunset date on that prohibition was removed, so it is the standing rule rather than a temporary one. The single exception is an ADU that has been sold separately to a qualified buyer.
For a JADU, it depends — and this changed on January 1, 2026. Owner occupancy is required only if the JADU has shared sanitation facilities with the main house. If the JADU has its own separate sanitation facilities, owner occupancy is not required. Where it does apply, the owner can live in either the JADU or the remaining part of the house.
Almost everything written before 2026 says a JADU always requires an owner on site. That is out of date, and it is worth knowing if you ruled a JADU out on that basis.
Can I rent it out on Airbnb?
Generally no, and for a JADU definitely not.
Cities are allowed to require that an ADU or JADU be rented for terms longer than 30 days, and most do — which takes short-term vacation rental off the table. For JADUs this is no longer optional: since January 2026 a JADU cannot be used as a short-term rental at all, and if rented must be rented for more than 30 days.
Long-term rental is the intended use, and it is what makes the numbers work anyway.
Can you help me find a tenant?
Yes. Bayfront is licensed with the California DRE, so once the unit is finished we can also place a renter in it. If rental income is the point of the project, that means you are not handing a finished ADU off to a separate agent and starting a new relationship from scratch.
Will building an ADU reset my property taxes?
Not on the whole property. Under Proposition 13, adding an ADU triggers a reassessment of the new construction only — the assessor adds the value of what you built to your existing assessed value. The original house keeps its existing base year value and is not reassessed.
The county assessor is the authority on your specific bill, and it is worth a call to them before you plan around a number. Brad can walk you through how the arithmetic usually shapes up against the rental side.
Find out what your lot can earn
A free site walk and feasibility check. So you can have a straight & honest answer.