Why Add an ADU to Your Multifamily Property?

Whether you own a fourplex with an unused storage room or a carport that your tenants ignore, adding an ADU to a multifamily property could turn that square footage into a valuable living space. Still, you will need to understand the ADU construction timeline, how the numbers work with an ADU builder in Murrieta, CA, and what California law allows before moving forward with the project.

In this guide, Builders Innovation Group will explain the advantages of these additions and what homeowners need to know about the process.

The Top Advantages of Adding an ADU

The strongest argument for any build is arithmetic that makes sense. Adding an ADU to a multifamily property may simultaneously increase the property’s income potential and value. If you look at the ADU’s rental income alone, you are sure to see the benefits for the property’s net operating income.

Going ahead with a project like this can also help you skip the largest line items in a ground-up development: 

• The lot
• The sewer lateral
• The water service
• The electrical lines

These already exist and serve the property, so your multifamily ADU should cost much less per square foot than an identical unit built from scratch. One well-placed unit serving a tight market can do several jobs at once, including delivering a higher ROI, supporting stronger appraisals on the rent roll, and reducing vacancy risk with a move-in-ready unit.

California’s ADU Regulations

If you are in California, the state’s ADU regulations under Senate Bill 1211 allow a lot with an existing multifamily building to add up to eight detached units. This is capped based on the number of homes already on the parcel. Cities must allow at least one ADU within qualifying nonlivable space in an existing multifamily building and must allow conversion ADUs totaling up to 25% of the building’s existing units.

State law strictly limits the standards Murrieta may impose on these multifamily ADUs. Applicable state height and setback limits still apply, but the city may not require additional parking for units approved under Government Code section 66323. A complete application to build an ADU should receive a decision within 60 days, though Murrieta’s preapproved plan program may cut that to 30 days for a plan on file. 

If you are looking to rent out the ADU, California law requires multifamily ADUs approved under Government Code section 66323 to be rented for terms longer than 30 days, and Murrieta also prohibits short-term ADU rentals. If you are adding an ADU to a multifamily property in Murrieta, any short-term rental income will likely be off the table for the foreseeable future.

What Affects Your ADU Construction Costs?

As with any project, you’ll want to budget honestly before you fall in love with a floor plan. Your contractor can run you through the expected ADU construction costs in Southern California for detached new builds. Garage or storage space conversions may fetch lower prices because the building’s shell already exists.

Units with 750 or fewer square feet of interior livable space may be exempt from local impact fees. Utilities are also a potential consideration, especially if your older building needs a panel upgrade or a larger water meter installed. It is best to learn about accessory dwelling units in your area by speaking with a professional before you make big decisions.

A Professional’s Approach to ADU Development

Building on an occupied property is quite different from construction on a vacant lot. There may be owners or tenants who continue to live there while crews go in and out. Sequencing is important, and factors like noise and parking access should be settled long before any demolition starts.

Builders Innovation Group follows a six-step process to ensure a job well done:

1. Discovery and vision
2. Design and documentation
3. Pre-construction planning
4. Controlled construction phase
5. Quality assurance checks
6. Final delivery with warranties

A contractor that makes assumptions about utility capacity or fire separation can cause setbacks and expensive surprises. As the homeowner, you should insist on a documented planning phase. That way, you should have plenty of time to change the details without adding time or unnecessary expense to the project.

Turn Your Property’s Underused Space Into Real Value With Builders Innovation Group

Builders Innovation Group designs and constructs accessory dwelling units across Southern California, following the regulations outlined in our ADU building guide. Our guide to home addition considerations covers key planning questions to help you get started.

Ready to talk about adding an ADU to a multifamily property in Murrieta, CA? Call Builders Innovation Group at (951) 574-2599 today to schedule a feasibility assessment.