ADU · Investment
Is an ADU a Good Investment in the Inland Empire?
ADUs generate rental income, increase property value, and pay for themselves. Here’s the math for IE homeowners.
Rental Income
What ADUs rent for.
Estimated monthly rent by region
| Region | Studio | 1BD / 1BA | 2BD / 2BA |
|---|---|---|---|
| IE Core | $1,200–1,600/mo | $1,500–2,000/mo | $1,800–2,500/mo |
| Temecula Valley | $1,400–1,800/mo | $1,700–2,200/mo | $2,000–2,600/mo |
| Desert Cities | $1,500–2,000/mo | $1,800–2,400/mo | $2,200–3,000/mo |
| OC Adjacent | $1,600–2,100/mo | $2,000–2,600/mo | $2,400–3,200/mo |
| High Desert | $900–1,200/mo | $1,100–1,500/mo | $1,400–1,800/mo |
ROI Example
The math on a Redlands ADU.
Example
750 sq ft 2BR / 1BA in Redlands
- All-in build cost
- $300,000
- Monthly rent
- $1,800/mo
- Annual rental income
- $21,600
- Simple payback period
- ~14 years
- Property value increase
- ~$180,000 – $216,000
- Net equity gain after build cost
- Break even to positive
Property value increase estimates are based on the 100x monthly rent rule of thumb commonly used in real estate. Actual values vary by market conditions.
More Than Rent
Beyond rental income.
✓Multigenerational living — house family nearby
✓Home office or studio space
✓Future flexibility — use now, rent later
✓Property value increase regardless of rental use
✓Hedge against housing costs for family members
Tax Considerations
Consult a tax professional for guidance on depreciation, rental income reporting, and potential deductions for ADU construction costs.
Run the numbers
See the return on your lot.
Book a free ADU consultation and we’ll model rental income and payback for your specific property.