We could all do with some extra cash flow.
It would give us more time off, pay for medical bills, or help kids afford college tuition. Uses can be many.
And in our pursuit for cash flow, we’re willing to look just about anywhere. Good opportunities for generating cash flow exist across the globe…
However, you don’t have to travel nearly that far to find what you’re looking for.
Today, Americans across the country are discovering a source of extra cash flow that’s been hiding in their own backyards.
Please don’t get your shovel out yet. I’m not talking about a potential oil field beneath your lawn, even though returns from this opportunity can be just as great.
An average backyard could potentially return up to 30% annually on the initial investment. Meaning, you would get your money back in just over three years. After that, it’s all profit.
Here’s how it works.
A New Law Makes This Cash Flow Available To Everyone
Lack of affordable housing in recent years has forced municipalities and states to update their zoning rules.
One significant change was waiving off impact fees for auxiliary dwelling units (ADUs), which soon spurred a mini housing revolution.
More and more Americans every day are building ADUs in their backyards.
In places like Oregon, demand for ADU permits is 20-times higher than it was 10 years ago.
And in California, which relaxed its ADU laws in 2017, the jump in permits was even greater.
Renting out ADUs is such an easy and profitable business that everyone wants to be a part of it.
Especially when you can build one for the price of a new car. Median costs for ADUs range from $40,000 to $50,000.
Of course, you could opt for a higher-end solution, which could set you back by about $100,000.
The rent you can collect from the property depends on the location. In Portland, Oregon, for example, typical rents range from $750 to $1,000 per month.
If you live in California or Colorado, where the affordable housing problem is worse, rents can be even bigger.
Does Your Property Qualify?
Intriguing idea, right?
If you’re considering building an ADU, first, determine where on your property you could set one up.
Do you have a place to build an ADU in your backyard? Or is there an existing building you could convert, such as a garage or a workshop?
You could even build an ADU above the garage, such as the one the Fonz lived in.
Another option is a “bump-out ADU.” This one shares a wall with your house, like a duplex. This can be cheaper to build because, in addition to a wall, it can also share installations such as water and electricity.
If you lack space in your backyard, you could consider a basement or attic ADU.
The point is, options are plenty. And the cash flow return can be very attractive.
Most of the residential housing stock is designed for families of four or more people. However, modern households consist of only one or two persons. Considering these two factors, the demand for ADUs should remain high.
Which means this cash flow source won’t dry up for some time.