Renting & Move-in
Phase Seven
- Understand what it takes to rent out your ADU
- Consider affordable pricing for your unit
- Make a long-term plan for the care and upkeep of your ADU
Project Timeline
Most ADU projects take 12-18 months to complete, but some extend to 24 months or more.
Step-by-Step
Complete preliminary steps
Renting step 1
Prepare to rent your unit by complying with all local rental rules (examples: filing a deed restriction, applying for a business license to rent it out), getting insurance, setting up utilities, and developing a plan to handle the finances – how do you track rental income, unit expenses and maintenance, utilities, etc?.
Understand rental laws
Renting step 2
ADUs may not be rented for less than 30 days, based on state law, and JADUs require owner occupancy on the property.
You will also need to understand all the laws related to being a landlord, especially with regard to discrimination. For an overview of California laws that regulate certain aspects of the rental housing market, review California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities, published by the California Department of Consumer Affairs. You should also talk to local Planning staff about regulations that might apply.
Consider signing up for a training on fair housing law offered by Fair Housing Advocates of Northern California.
Set the rent
Renting step 3
Many homeowners are motivated to rent their ADU affordably to community members because they serve essential roles and often have difficulty finding housing that meets their needs. If you financed your construction with a loan, consider the loan length, interest rate and any reserve funds you have as well.
Maximizing the rent is often not the only consideration – setting a fair rent a bit under market rate will help you attract and keep good tenants. Consider pricing your unit so that it is affordable for the local workforce and families who may not be able to afford high rents in the city.
The Marin Housing Authority has established the Landlord Partnership Program, which aims to expand rental opportunities for families holding housing choice vouchers.
Key Resources
Write your lease
Renting step 4
Make sure your lease (or rental agreement if it is month-to-month) clearly identifies all the expectations for you and your future tenant. See our Exercises for help planning your lease. Some jurisdictions may require landlords to initially offer a one-year lease to tenants, so talk to Planning staff to confirm if this is a requirement.
You will need a rental application to give to prospective tenants and a lease or rental agreement if it is month-to-month. Samples are available online. Once you select a tenant, you should collect a security deposit and first month’s rent when you sign the lease. Conducting a move-in inspection with your tenant is also a good idea.
Key Resources
Find a tenant
Renting step 4
Research how to successfully advertise your ADU and select a good tenant. Along with work of mouth or posting your rental online, you can also contact nearby schools, faith communities, or other similar locations to see if any teachers, staff, or community members are looking for housing.
Typical methods for advertising rentals include sites like Craiglist and other online listings; neighborhood-based email list-servs; and posting a “for rent” sign on your property. Make sure to look up local rules about real estate signs, which may limit the size, quantity, and other characteristics of your signage.
Marin has a free local service called Home Match Marin – Front Porch that will connect you with people seeking to rent a affordable-rate ADUs on someone else’s property. Participants are vetted with interviews and bckground checks. See their website for more details.
Key Resources
Manage your rental unit
Renting step 5
Other issues to consider:
- Maintenance According to state law, it is your responsibility as a landlord to maintain a “habitable” ADU, and note that you’ll need to give your tenant(s) 24 hours’ notice before you or maintenance providers can enter the unit.
- Rent increases Make sure you understand the rules about increasing the rent – California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities is a good resource.
- Eviction Hopefully you and your tenant(s) will not have problems, but if problems do arise that cannot be resolved, you will need to consider eviction. It’s recommended that you work with a lawyer if eviction is necessary. State law mandates a judicial eviction process, which is best handled by a lawyer. Some communities have additional and more specific ordinances for just cause evictions, so please clarify the rules in your area.
- Reporting rent Some cities may require ADU and JADU property owners to report rent charged. Check with Planning staff to see if there are reporting requirements for ADUs.
FAQs
Find answers to the most frequently asked questions about renting and move-in.
What about the money I could make renting the ADU?
Rental income is a major benefit of having an ADU or JADU on your property – for many people, it provides flexibility in their budget or an opportunity to grow their savings. Our ADU Calculator can help you estimate how much rental income could be generated by your new unit. Note that many locations do not allow ADUs to be rented for less than 30 days at a time – confirm with local Planning staff in your community.
When is my ADU ready for move-in?
As soon as the final inspection is complete, your ADU is ready for move-in! Make sure utility services are set up, an address is established, and other preparations are in place. See the Renting & Move-In page for more responsibilities of being a landlord.
What do I need to know about becoming a landlord?
Renting an ADU comes with many responsibilities, including understanding local and state housing laws, executing a lease, finding and managing a tenant, and maintaining a rental property. It’s important to understand the laws as they may affect things like future rent increases, changing use over time, evicting tenants, and moving family into the unit.
See our Workbook for resources on understanding rental laws, tenants’ rights, and more, and our Exercises for help with your lease terms.
Can an ADU or JADU be used as a short-term/vacation rental?
Many locations do not allow ADUs to be rented for less than 30 days at a time – confirm with local Planning staff in your community.
Are there local resources for landlords?
Yes! 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.
