How much do property taxes increase when building an ADU in El Cerrito, CA?
New Avenue created a one-bedroom accessory dwelling for a client in El Cerrito. The client wanted to add an ADU that she could rent out or use for her aging parents or adult children as needed.
With over 750 projects in our portfolio, we’ve seen that most homes need four major changes to bring them up to date. These include a full master suite, an open kitchen/living area, upgrades for sustainability, and an ADU.
Adding an ADU to this property in El Cerrito is a great move that will make a huge difference in the homeowner’s life.
How much of a property tax increase can you expect when adding an accessory dwelling?
This small ADU cost $250,000 for design, permitting, all site work/engineering, and construction. When adding a backyard cottage or in-law suite of this size in El Cerrito, you can expect to see a tax increase equal to one-half of one percent of the full cost of the project. In this case, the tax increase comes to $1,250 per year.
The main home is not reassessed when an ADU is added.
That tax increase breaks down to just $104.16 per month. That’s easily covered by the monthly rental income. The ADU will easily rent for $2,000 per month or more, leaving enough money to pay off the mortgage on the ADU in just a few short years. After that, the rent money is available for the homeowner to use for her main home, education, travel or anything else she may want.
Is bigger always better?
When adding an ADU for family use, 800-1000 sq ft is a good size. The cost of an ADU of that size with an all-electric, net-zero energy standard is generally $500,000, including custom design, engineering, permits, red tape, all site work, and construction. We recommend going as large as possible because a larger home will bring in more rental income and pay for itself. A two-bedroom unit can rent for $3,300 per month, while a three-bedroom home will rent for $4,500 per month.
The best way to transform your home
New Avenue provides a full-service design/build solution for anyone who wants to get more from their home. We create all-electric, net-zero energy custom homes, ADUs, family compounds, and whole-house remodels that serve their owners for generations. Take a look at our portfolio and then contact us to discuss your goals. We’ll answer all your questions and introduce you to the design/build team that’s perfect for your project.
