FREE Accessory Dwelling Unit?
Did that get your attention? Good, it should have! Are we giving away a free ADU? Absolutely not.
So how can you get an ADU for free then?
Do you own a single family home in London, Ontario?
Do you have a few years worth of equity in the property?
If you answered yes to both of those questions, you could likely have an income producing ADU built using none of your own money. Here's how:
I can build an ADU for $82,160? Not quite! But stick with me...
I'll break down the math even further:
Okay, so you'll see here that it's not totally free BUT it could be! In this example you'd need to pay $2,840 out of pocket for your brand new ADU. O ur numbers are definitely conservative, especially on the appreciation given the rise in property values in London over the last 2 years. But we like to play it safe with numbers.
In reality the house in this example would have appreciated to closer $430,000 vs. our 5% per year estimate at $383,000. Then your ADU would be totally free!
Let's compare the rental income of this property as well:
You'll notice that we've increased the taxes, insurance and property maintenance values with the ADU. One of the downsides to adding an ADU to your property would be the slight increase in those three things, but I think the significant cash flow increase more than makes up for it!
It would also be realistic to increase the rental income on the Single Family Home to closer to $2,000 from $1,700 four years ago. Now that's what we're talking about! And remember, this is all for very minimal if not zero out of pocket expense! Depending on the scenario, you may actually to pull some tax free cash out on refinance!
We are on pins and needles waiting for the City of London to open back up so we can get moving on building income producing ADUs in backyards across the city!
Do you need equity to build an ADU? Definitely not. Send us an email and we can help you figure out how to get an ADU on your property.