LA Guest Homes (LAGH), the boutique building firm specializing in backyard homes or accessory dwelling units (ADU’s), has had a busy year. Defying pandemic odds, the group launched in 2020 earning new clients all across Southern California and firmly positioning itself to become an industry leader.
In 2020, California law made it easier for homeowners to build backyard homes. In fact, the criteria have been so simplified that every residential home can be permitted to host at least one ADU and sometimes two on a single property. “This means you can make your garage liveable, build a trendy tiny home in your yard, and more if your space meets certain minimized criteria,” adds ADU consultant and California real estate agent Brandon Sanford.
According to LAGH, property owners are adding living space for many different reasons. This year, however, most of their clients are building ADU’s as rentals to generate passive income averaging $2,200 monthly. Many others are adding living space for quarantining logistics like adding a home office or gym, and accommodating returning students or high-risk family members. “The heart of what we’re doing is helping families capitalize on more flexible building laws to keep their homes and safely accommodate loved ones,” says LAGH president, attorney and Los Angeles community figurehead Bob Burke. “It’s been incredibly empowering and rewarding for LA homeowners.”
The residual homeowner’s benefit from ADU’s is equity gained from added living space. One simple formula used by LAGH is to take a home’s current value, divide it by the existing liveable square footage, then multiply that by the new ADU square footage. The equity boost compared to the building costs is undeniable and allows families seeking financing to pitch lenders who consider a home’s post-ADU value as a qualifier.
“Many homeowners live with an underutilized indoor space or outdoor lot, clearly know its potential, but don’t have the time to moonlight as a construction mega-hyphenate,” explains startup business advisor Ivan Hernandez. “A one-stop shop like LAGH with a mission to empower homeowners with minimal interruption to their daily lives is exactly what consumers need right now.”