The ADU Strategy:
Hidden Income in Plain Sight.

An Accessory Dwelling Unit is a second housing unit on a single-family lot. California's 2020–2024 legislation made them easier to build and rent than ever — creating a $1,200–$2,500/month income stream that most military buyers don't know exists.

What California Law Now Allows

• ADUs up to 1,200 sq ft — permitted by right on most single-family lots
• Junior ADUs (JADUs, up to 500 sq ft) inside existing homes — widely approved
• Dramatically reduced utility connection fees
• No minimum parking requirements in many areas
• 60-day permit processing required by law in most CA jurisdictions

Three ADU Paths for Military Buyers

Path A — Buy a Home with an Existing ADU
Simplest and fastest. Buy a property that already has a permitted, rentable ADU. Live in the main home, rent the ADU from day one. These properties command a premium, but the income justifies it immediately.

Path B — Buy a Home with ADU-Ready Potential
Buy a property with a large garage, detached structure, or lot that can support a new ADU. Build or convert ($80,000–$180,000 in San Diego). The value added typically exceeds construction cost significantly.

Path C — Maximize on PCS Cycles
Buy a home with ADU potential at your current duty station. Build the ADU before your next PCS. When you PCS, rent both the main home and ADU for maximum passive income.

What to Look for When Searching

• Lots over 5,000 sq ft (urban) or 7,500+ sq ft (suburban)
• Large detached garages — especially 2-car or larger
• Properties described as having a "workshop," "studio," or "casita"
• 1940s–1970s construction (often have ideal detached garages for conversion)
• Listings mentioning "development opportunity" or "large lot"

The 4-Year Impact

At $1,600/month net ADU income over a 4-year tour: $76,800 in passive income. Plus the property value increase from the ADU (typically $150,000–$250,000 in San Diego). This is the highest-ROI play in California military real estate right now.