Can I list my ADU on Air BnB? For Los Angeles and surrounding areas

The answer to this question depends entirely on where you live. 

If you live in the city of Los Angeles, the answer is maybe. 

If a permit for your ADU was completed before January 2017, you may live in your main house and offer the ADU on Air BnB and other house-sharing sites.

However, if your ADU was built after January 2017, you can only host your ADU on house-sharing sites if the ADU is your primary residence.

Besides Air BnB, other house-sharing ordinances in Los Angeles include the following: 

• Homeowners who list their units on short-term rental sites must register with the city and pay an $89 fee.

• Hosts can only register one property 

• Hosts must live on that property for more than six months of the year.

• Hosts can only rent their units for 120 days a year unless they sign up for an “extended home-sharing” option that lets them rent year-round.

• Hosts are responsible for the 14% transient occupancy tax the city of Los Angeles imposes for stays of 30 nights or less.

• Hosts are required to file a monthly return with the city regarding these taxes. 

In addition, all hosts are required to register with the city. Along with the $89 fee, hosts will have to present a state ID with an address that matches the one they are registering, as well as another proof of primary residency (such as a copy of your DWP or gas bill).

There are similar restrictions on home-sharing ADUs in Los Angeles County, and the cities of Santa Monica and Pasadena.

If you have questions, contact the Department of City Planning or other city agencies in your area directly, or consult a local lawyer or tax professional.

BE ADVISED: There are fines associated with not following these regulations. Hosts that fail to comply with these regulations after being cited could be charged fines of $500 a day or more in the city of Los Angeles.

Click here to read about rules before getting started on the design of your ADU/Garage Conversion 

Click here to see floor plan designs of our ADU/Garage Conversions 

Los Angeles ADU/Garage Conversion - Long Term Leasing 

Given these restrictions and the fact that many cities are still deciding on how to regulate short term leases, you may want to think about renting your ADU, garage conversion or granny flat to a long-term tenant. 

There are benefits to having a long-term tennant. First of all, you will avoid the regulations that come with running an Air BnB. Also, you will be spared the cost of furnishing your ADU for short term renters. You won’t need to buy any beds, tables, and chairs, etc. In addition, you won’t have to clean your unit after every Air BnB stay or launder bedding and towels. You also won’t have to buy any kitchen essentials for your unit. Think of the savings!

Also, with a long-term tennant comes income stability. You will be able to collect rent every month, instead of relying on renters who stay for a few days at a time. 

The housing crunch is at an all-time high in the Los Angeles area. If you have a long-term renter, not only are you helping to ease that housing crunch, you will also get a return on your initial investment within a couple of years. 

Plus, your home will be making you money every month. The average rent for an ADU is $1700 a month in Los Angeles. After monthly expenses including utility fees and upkeep costs, you can expect to make about $860 of income per month from your ADU! 

You can also expect your property to appreciate in value -- sometimes by up 51% in some cases.

ADU/Garage Conversion - Long Term Renting In Los Angeles

When you rent out your ADU/garage conversion/granny flat, there are some things to consider. First of all, consider all the factors of renting into account. This includes screening tenants, placing ads and deciding how to cost-share utilities.

You will also want to find competent, reliable tenants for your ADU. You may want to:

• Advertise your ADU on rental and real estate websites.

• List your ADU in the newspaper or online resources, such as Craig’s List or Facebook Marketplace.

• Contact a property management company or real estate agent for help

• Word-of-mouth!

Once you find that perfect tenant, you will have to decide what kind of rental agreement to sign with them. There are basically two types of rental agreements:

Month-to-Month - ADU Rentals In Los Angeles

A month-to-month lease is automatically renewed each month unless either you or the tenant gives written notice to end it. According to California law, this type of lease cannot be terminated in the middle of any month unless you agree to end it. If you (the landlord) want to end the tenancy, you can only do so at the end of the month and only after giving 20 days’ written notice. 

Though this type of agreement can be verbal, a written contract is recommended to avoid any possible misunderstandings. If you need help writing a standard agreement, you can get one from a real estate agent or have one prepared by a legal advisor.

Lease Tenancy - ADU Leasing In Los Angeles

This type of rental agreement is made for a specific period of time, typically one year. This agreement must be written, signed and notarized if the tenancy agreement is going to be longer than one year. With a lease agreement, the tenancy automatically ends on an agreed-upon date. It can be renewed after that.

As with the previous agreement type, you can write it yourself, contact a real estate agent, or speak to your legal advisor.

Monetize Your ADU/Garage Conversion

Whatever rental option you choose, converting your garage into an ADU or granny flat is a great way to monetize your home. Not only will you increase the property value of your home, but your home also will be generating a monthly income for you. 

However you choose to rent out your ADU/garage conversion, Granny Flats Design is here for you. Let our team of experienced experts help you turn your garage into the money-making machine it was meant to be.  Give us a call today for a free estimate at (1-818-532-0482).