Rental Income: What Your ADU Will Actually Earn

Time to put numbers on the goal that drives most projects. Two disciplines here: estimating the gross honestly, and converting it to net — the number that actually shows up.

Estimating gross rent — the method, not just figures: your ADU rents in the same market as small apartments nearby. So research it like a tenant: search current listings for comparable size/bedroom units within a mile, note asking rents for the bottom-of-stairs-no-laundry units versus the bright-with-washer units (that spread is your Module 8.8 design premium, quantified), and expect your new-construction ADU with laundry and private entrance to sit in the upper band. Broad California planning ranges (2026, varying hugely by metro): studios $1,400–$2,200, one-bedrooms $1,800–$2,800, two-bedrooms $2,400–$3,800+ — coastal metros above these, inland below. Your own market check beats any table, including this one.

The gross-to-net waterfall — where beginners' math fails: from gross rent, subtract honestly:

• Vacancy (~4–8%: one month every 1–2 years between tenants — 6.8's lease-up warning, annualized)
• Maintenance and repairs (~5–8% of rent; new construction runs light early, but water heaters and paint are patient)
• Utilities you cover (your 7.2 metering choice, monetized: $0 with a separate meter; $100–$250/month if bundled)
• Insurance delta (the rider from 14.8 — modest but real)
• Management (self-managing one unit behind your house is realistic for most; a manager takes 6–10% if you'd rather not — honest option, honest cost)

A worked example: 750 SF 1BR in a mid-tier SoCal market. Gross $2,300. Minus vacancy (6%, $138), maintenance ($150), bundled utilities ($150), insurance delta ($40) = ~$1,820 net, self-managed. Against a $300K build financed at recent rates, that's a meaningful mortgage offset rather than a get-rich number — which is the honest shape of ADU economics: a durable income stream and a major asset, not a lottery ticket. (Lesson 14.3 turns this into ROI properly.)

Three rent-maximizers worth repeating from the design modules: in-unit laundry (8.8's champion, worth $75–$150/month), genuine privacy (8.5 — tenants pay for homes, not rooms-behind-a-house), and light (8.6 — bright photos rent units; the listing photos are the harvest of every window decision).