Congrats on building your ADU!
As you get ready to rent your second unit, it’s important to consider everything that comes with being a landlord.
✓ Preliminary steps
Once you’ve completed your final inspection and have a certificate of occupancy, it’s time to get a business license and find a tenant. Contact your local jurisdiction to learn more about licensing requirements. Prepare to rent your unit by getting insurance, setting up utilities, and developing a plan to handle the finances.
✓ The law and being a landlord
You will need to understand all the laws related to being a landlord, especially with regards to discrimination. Review the Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities published by the California Department of Consumer Affairs for an overview of California laws that regulate certain aspects of the rental housing market. You should also talk to your local jurisdiction about regulations that might apply. Consider signing up for a training on fair housing law offered by Fair Housing Advocates of Northern California.
✓ Setting the rent
Maximizing the rent is often not the only consideration – setting a fair rent will help you attract and keep good tenants. If you financed your construction with a loan, consider the loan length, interest rate and any reserve funds you have. Consider pricing your unit so that it is affordable for the local workforce including teachers, firefighters and families who may not be able to afford high rents in the county.
The Real Community Rentals Program, an initiative of the Community Land Trust Association of West Marin (CLAM), offers incentives for homeowners to create rentals on their property and set rents at reasonable levels. The Marin Housing Authority has established the Landlord Partnership Program, which aims to expand rental opportunities for families holding housing choice vouchers.
✓ Rental leases
Make sure your lease (or rental agreement if it is month-to-month) clearly identifies all of the expectations for you and your future tenant. Click here to download a sample lease template →
✓ Finding a tenant
Understand how to successfully advertise your unit and select a good tenant. HomeMatch is a program the county has partnered with that helps seniors screen for roommates.
✓ Tenant management
Have a long-term plan for the care and upkeep of your second unit, and how to address any issues with your tenant.