| Ok. Can we have a (minimal as you want) financial plan? I mean, let's say that the building (by a professional contractor, with architect/engineers/whomever professional assistance, with all permits, etc., i.e. "turnkey") is going to cost to a "normal" person US$ 120,000 (or if you prefer 20% more than your $100K (which sounds to me appropriate, probably something in the 50-60 sqm or 500-600 sqm net surface). Example of such an ADU: https://crossconstruction.com/wp-content/uploads/2019/03/Des... How much is the expected income (rent - taxes) per year?
US$ 20,000 per year or 1,600 US$/month? How much is the rate of the mortgage if you "simply" borrow the money from a bank? (let's say a minimal down payment of 10,000 and thus a loan of 110,000) It should be (roughly) anything between 500 and 600 US$/month for a 30 years mortgage (fixed rate), let's make it 7,000 US$/year. Besides the downpaynent of 10,000, at fixed prices (which is likely NOT the trend for rents in an area where people resorts to living in ADU's) you get 1,600 US$/month, spending 600, i.e. a net of 1,000 per month, so first year you get nothing (to compensate the down payment) and for the remaining 29 years it makes US$ 377,000 (29x(20,000-7,000). With your formula, it is 30x10,000=300,000. But - IF the rents ar going to increase in these 30 years - the difference will soon become huge. |