What is the increase in property taxes when building a one-bedroom ADU in Oakland?

New Avenue designed a one-bedroom accessory dwelling for a family in Oakland. The ADU has a bedroom, a bathroom, a kitchen, a living area, and a loft for storage.

The homeowner had three ideas in mind for the ADU:

1)      Rent it out

2)      Live in it herself and rent out the main home

3)      Use it as a guest house

A project like this costs around $350,000 for design, permitting, engineering, site work, and construction.

How much do the property taxes increase when adding a 400-square-foot ADU in Oakland?

Property taxes usually increase by an amount equal to one-half of one percent of the total cost of the project. In this case, adding the ADU results in a $1,750 annual property tax increase. The main home is not reassessed with the addition of the ADU.

An ADU is a smart investment

Over 750 projects have taught us that most homes need four things to bring them up to date:

1)      An open kitchen/living area

2)      A new primary bedroom suite

3)      Whole-house sustainability upgrades

4)      An ADU

If the owner rents out the ADU, it will bring in at least $2,000 per month in rent. (A two-bedroom ADU would bring in $3,000 per month, and a three-bedroom ADU would bring in $4,500 per month.) A rent income of $24,000 easily covers the mortgage payments and the tax increase of $1,750, with money left over for other needs.

If the owner uses the ADU for herself and rents out the main home, she can bring in $3,500 to $4,000 per month.

How to get yours without the usual hassle

New Avenue offers the only transparent pricing in the industry. We draw real data from 750+ projects to provide accurate quotes and timelines. Our design/build model means you get everything included: design, permits, all red tape, all site work, engineering, and construction. We work only with proven, experienced design professionals and contractors.

Click the button below to contact us about your property. We’ll answer all your questions and, when you’re ready, we’ll introduce the design/build team that’s right for you.