INVESTING & ROI

The return on investment (ROI) for an Accessory Dwelling Unit (ADU) in San Diego can vary

depending on several factors, such as the cost of construction, rental income, property value, and maintenance expenses. However, ADUs in San Diego have become increasingly popular due to the high demand for affordable housing, and they can provide a good return on investment for property owners.

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According to a recent report by the San Diego Housing Commission, the average cost of building an ADU in San Diego is between $150,000 to $200,000. This cost can vary depending on the size, type, and location of the ADU. However, the rental income generated by an ADU can be significant and can help offset the cost of construction.

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In San Diego, the rental income for ADUs can vary depending on the location, size, and condition of the unit. However, it's not uncommon for ADUs to rent for between $1,500 to $2,500 per month, depending on the market conditions. Assuming an ADU rents for $2,000 per month, the gross annual rental income would be $24,000.

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The ROI for an ADU in San Diego can be calculated by dividing the net profit by the initial

investment. To calculate the net profit, the annual rental income should be subtracted by

expenses such as property taxes, maintenance costs, insurance, and mortgage payments.

Assuming an average annual expense of $10,000, the net profit would be $14,000 per year.

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Therefore, the ROI for an ADU in San Diego can range from approximately 7% to 9% per year,

depending on the specific property and market conditions. It's important to note that this

calculation is based on certain assumptions and may vary depending on individual

circumstances. Property owners should conduct a thorough analysis of their specific situation

before deciding to build an ADU.