Do You Want to Make the Most of Your Home?
Why your home isn't an asset... yet!
Do You Want To Make The Most of Your Home?
Hey, we’re Framework First! We’re determined to make the most of each and every home. Our only question is will yours be next?
We all have been taught to want to buy a home, the American Dream. Buy a house, pay a mortgage for 30 years and then retire when you are 65. White picket fence, 2 kids, a dog and, of course, a career building job and you were well on your way. This is what we were all taught, but after reading Rich Dad, Poor Dad, by Robert Kiyosaki most of us think differently now.
Things we learned from Rich Dad, Poor Dad:
- Your house is not an asset
- Your house is actually a liability
But, what about the new California HOME Act laws?
Take advantage of the new California laws for ADU/JADU and even add a duplex. Turn your house from a liability to an asset by adding a rental unit or two! Maybe even 4! WWRKD? (What Would Robert Kiyosaki Do?) I think Robert would add on a rental unit or more and start making his California home work for him. I definitely think you should do the same! There are some restrictions, but here are some options to turn your property into an asset instead of just a liability.
- Add on a duplex to your house (2nd home attached by a wall) and rent it
- Add on an ADU in the backyard and rent it
- Convert your garage into an ADU and rent it
- Subdivided your lot and sell half—just kidding, keep it for the rental income
How much money can you make from your house?
The rental income will vary depending on how many separate units or homes you can (or decide to) add onto your property. There is also the matter of cost. It is most economical to add on the least expensive unit first and then let that income help to pay for additional units. Of course you may be able to subdivide your lot into 2 parcels of land/homes and sell 1 of the parcels. This is an option, but really, likely your best bet is to keep all of the rental units and keep collecting the rent. Usually there will come a point, sometimes as long as 10 years when your duplex will be completely paid off, of course this varies. At that point all of the income will be complete profit. As The Rich Dad teaches us, when your passive income pays for all of your expenses then you have true freedom. You can do anything you want with your day and the rental income will still keep coming in. Although there are limits on rent increase, and you do want to keep your tenants happy and continent, small increases every year will help cover your increase in property maintenance and upkeep.
Another thing to remember is that many of us in California may already have some rentals on our property that may not be legal. Now is the time to get them legalized with your Planning and Building Departments so you don’t have to worry about that in the future.
- Illegal garage units
- Illegal outbuildings
- Unauthorized backyard rental units
- Illegal attached studio units
Making your illegal rental will not only take some stress and worry off of your shoulders, it is easier to do now. Most City and County offices will help you to make the unit safe and legal. Primarily they are looking for safety compliance, which is much easier and less expensive than you might think. Also, no more tenants having the upper hand knowing that your unit is illegal and they may have a very low rent. Be fair, but you will have some additional costs to bring the unit into compliance. And overall this will keep everyone safe!
About Framework First
Framework First is a construction company that specialized in ADU, and has over 38 years of construction experience. We strive to change the lives of homeowners, one ADU at a time.
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- January 25, 2022
- 8:49 pm
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