Posted by Braedon Flynn on Wednesday, March 29, 2023 at 6:48:05 PM Comment
Investing in rental properties is a great way to build wealth and generate passive income. Orange County, CA, with its proximity to the beach and desirable location, presents an excellent opportunity for investors looking to enter the rental property market. However, with real estate prices in Orange County being notoriously high, it can be challenging to find affordable rental properties that generate good returns. That's why converting a garage into a rentable accessory dwelling unit (ADU) can be an attractive option for investors.
If you're looking to buy your first rental property in Orange County, East Side Costa Mesa is an excellent location to consider. Buying a home that you can live in, A two-bedroom, one-bathroom house in this area is an ideal investment property, and with a little work, it can become a lucrative rental. Here's how to do it. One strategy that many real estate investors use is to purchase the property as their primary residence and then convert the garage into an ADU while living in the home for two years. This approach can help you secure a better interest rate on your loan since owner-occupied properties typically receive more favorable rates. First, find a property that has a detached or attached garage. If it doesn't have a garage, you can consider building one, which can be a valuable addition to the property. Once you have the property, the next step is to convert the garage into an ADU. An ADU is a separate living unit that can be rented out to generate income. The process of converting a garage into an ADU involves getting a permit from the city and making necessary modifications to the structure, including adding plumbing and electrical lines. Once the conversion is complete, you'll have a rentable ADU that can generate a steady stream of income. In Orange County, ADUs can rent for between $1,500 and $3,000 per month, depending on location and amenities. By renting out the ADU, you can significantly reduce your monthly mortgage payments and build equity in your home. The rent generated from the ADU can be used to offset your mortgage payments, which can help you pay off your mortgage faster. Additionally, if the property's value increases over time, you'll be building equity that you can use to invest in additional properties or use for other investments.
In conclusion, investing in rental property in Orange County can be an excellent way to generate passive income and build wealth. Converting a garage into a rentable ADU can be an attractive option for investors looking to enter the market. By renting out the ADU, you can reduce your monthly mortgage payments and build equity in your home, making it a wise investment in the long run. With a little research and the right property, you can be on your way to becoming a successful rental property owner in Orange County.
This home is listed by: AJ Olson Whitfield of Villa Real Estate
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