Should You Build a Portland Oregon Accessory Dwelling Unit?

Portland Oregon Accessory Dwelling Unit

Are you thinking about investing in a new rental property, but you can’t decide if you want to move forward with buying one now or not? If so, instead of investing in a new rental property, why not invest in building a Portland Oregon accessory dwelling unit on your property instead?

If you’re unfamiliar with what an accessory dwelling unit is, this article will break down ADU’s and provide you with everything that you need to know about getting started with building one on your property in Portland, Oregon.

What Is an Accessory Dwelling Unit?

Although they are currently referred to as accessory dwelling units, ADU’s have been in existence for decades. Most people would also know them as in-law suites, guest homes, granny flats, secondary dwelling units, or Casitas.

These homes provide the primary homeowner with the ability to offer guests or in-laws a place to stay when they are in town, or possibly as a principal residence for someone in their family.

In 2020, accessory dwelling units have become more popular than ever before because they are an easy way to bring more inventory to the rental market in Portland Oregon.

Since they don’t require hundreds of thousands of dollars to build and an ADU can be ready for tenants within as little as 90 days.

Independent Living Unit

What most people don’t know about accessory dwelling units in Portland, Oregon, is that they are fully Independent living units. This means that a typical ADU, will have a bathroom, living area, sleeping area and a kitchen.

In today’s world, most accessory dwelling units are located on the same property as a single-family home. The good news about building an ADU in Portland Oregon is that the city council has made it much easier over the last five years for homeowners to build accessory dwelling units on their properties because of the fact that they have been alleviating the housing crisis in the PDX area.

Are accessory dwelling units’ tiny homes? The answer to this question is no. Tiny houses are typically a structure that is built on wheels and can be easily moved from one location to another. An accessory dwelling unit is not built on wheels; it’s a fully functioning house, although it’s much smaller than a typical home in the United States.

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What Does It Cost to Build An ADU?

Thanks to recent data from the Oregon Department of Environmental Quality, we know that the median cost to build an accessory dwelling unit in the city of Portland, Oregon, is about $90,000.

Before getting Shell Shocked with the price, keep in mind that price is for building an ADU from the ground up. Thankfully, there are other ways to make an accessory dwelling unit that are a lot less costly; in fact, you can start with purchasing a pre-built cabin, have it shipped to your property and convert it into an ADU for under $30,000.

Before building an accessory dwelling unit, you should first establish what your budget is going to be because this will save you the hassle of spending more money than you want to on this project.

Thankfully, there are a wide variety of ways to finance the construction of an accessory dwelling unit, including applying for an FHA 203(k) renovation loan, cash-out refinance or HELOC.

Once you determine your budget and how you’re going to finance an accessory dwelling unit, you should next research the style of the ADU that you want to build on your property.

The best way to do this is to research either ADU’s in your neighborhood to see what types of accessory dwelling units your neighbors have built. You should also investigate what your neighbors are renting their ADU’s for so that you can confirm that you will be able to rent yours for a fair market rent.

Steps for Getting Started with Building an ADU In Portland

ADU Requirements

There are a variety of design and use standards in the zoning code which apply to the creation of an ADU. These include limiting the overall number of residents in both units, limitation concerning home occupations, and the location of entrance doors and size of the ADU. Where an ADU is created in a new detached structure, there may be additional standards regulating the exterior appearance and materials of the ADU depending on the height of the ADU. These other standards include provisions for the roof pitch, trim, eaves, and windows.

When converting an existing unfinished space to an ADU, some features, such as ceiling heights, windows, stairs, and insulation, may not meet current building code requirements for finished space. These conditions could make it expensive, complicated or even impossible for you to change your attic, basement, or garage into living space.

The ADU Program Guide outlines zoning requirements, construction standards, utility standards, and other requirements in detail.

For additional requirements that apply to detached ADUs, please see the Detached Covered Accessory Structures Worksheet.

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Portland Is One of The Best Cities in The Country to Build An ADU

Portland is pretty widely recognized as the leader of ADUs in the US. What that means is that Portland has the most flexible ADU regulations out there, in terms of placement of the ADU as well as what structural forms the ADU can be. It doesn’t just have to be a basement or an attached ADU. It can be detached.

Specifically, we do not have requirements that ADUs have an off-street parking spot. Every jurisdiction around Portland requires that. Another thing is the no-owner occupancy requirement. In most jurisdictions, there’s a rule that if you build an ADU, you have to live on that property for the rest of your life or sell the property. You can’t rent them both out. That affects the value of ADUs, it affects the appraisals, and it affects the ability of homeowners to finance ADUs.

Contact Rent Portland Homes

To learn more about building an ADU in Portland, Oregon, or to speak with us about our property management services, contact us today by clicking here.



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