The Definitive Guide to ADU Rents in San Diego 2023

Have you ever considered renting your ADU or building one to generate an additional source of income? This blog’s for you! Explore the ADU rental journey and uncover the ins and outs of Accessory Dwelling Units rents in San Diego.


Learn how to maximize your ADU rental success and provide attractive housing options.

Fernanda Castillo

From regulations to legal obligations, this guide answers the most frequently asked questions by homeowners looking to benefit from the increasing popularity of ADUs to create a second stream of income.


ADU Rentals 101: The Basics


ADU Rentals: Legal, Permits & Regulations


ADU Profiting, Expenses and Taxing

Book a Free Consultation to see how you could benefit!

ADU Rentals 101: The Basics

Can I rent out my ADU?

If you own an Accessory Dwelling Unit (ADU) in San Diego or are considering building one, you might wonder whether you can rent it out. The answer is yes!

ADUs have been embraced as a way to address the housing shortage and increase affordable housing options in San Diego, allowing homeowners to contribute to the community’s housing needs while creating an extra source of income through the rental of these units. 

It is possible to rent your ADU for a short-term stay (less than 30 days) and for the long term (typically 30 days or more), but keep in mind there are vital factors to consider and regulations to follow.

Long-term rental

This type of leasing typically lasts for 30 days or more, even extending the contract for one or two years. So if what you’re looking for is consistency and a stable source of income, then a long-term rental is the answer!

Although there are both positive benefits and a few drawbacks, let us first focus on the positive aspects of using your ADU as a long-term rental.


  • You won’t have to deal with frequent vacancies. 
  • You will offer your tenants a more permanent housing solution.
  • Lower turnover costs compared to short-term rentals. 
  • Fewer legal complexities. 
  • Long-term rentals are easier to manage. 


  • Long-term rentals usually involve more extended lease agreements, allowing little flexibility.
  • Potential tenant issues.
  • Increased wear and tear on the ADU. 
  • Rent control regulations. 

Short-term rental

Renting your ADU for temporary terms might be an appealing choice if you’re looking to tap into San Diego’s travel and tourism sector. 

For example, one of the key advantages of short-term rentals lies in the potential to earn more revenue over the course of a month compared to traditional long-term leasing, as you’ll be able to charge per night. 

But as attractive as this sounds, you may need to know that short-term rentals come with a set of pros and cons.


  • High rental fees.
  • Flexibility for personal use.
  • You can adjust your rent rates based on peak and off-peak seasons to maximize your earnings during high-demand periods.
  • Property management can be easier as most rental platforms often provide hosts with guidelines and cleanliness standards to maintain a high-quality guest experience.


  • Potential gaps between guests may lead to no rental income. 
  • Frequent turnover of guests can lead to more cleaning and maintenance expenses.
  • This type of rental requires more active marketing efforts to attract guests and maintain booking rates.
  • You may have to invest more in furnishing and having a well-equipped space. 

Short-term rentals in San Diego must comply with local regulations and licensing requirements, such as obtaining a Transient Occupancy Registration Certificate (TORC) and adhering to zoning ordinances.

390 sq ft ADU for Airbnb rental
700 sq ft ADU rental unit in Oceanside, CA

ADU Profiting, Expenses and Taxing

How Much Can You Profit?

One of the most appealing aspects of adding an ADU to your property is the potential for increased profitability. An ADU can serve as a valuable source of additional income through rental or other uses. The profit you can make from an ADU depends on various factors, including the size, location, amenities, and local rental market conditions.

ADUs can offer a return on investment (ROI) ranging from 5% to 20% or more, depending on the specific circumstances and local housing market. For example, in areas with high demand for rental properties, you can charge higher rents and achieve a higher ROI. Conducting market research and comparing rental rates for similar ADUs in your area can give you a better idea of potential rental income.

Recurring Expenses for Landlords

While an ADU can be a lucrative investment, knowing the recurring expenses of being a landlord is crucial. As a landlord, you’ll be responsible for various ongoing costs, including:

Maintenance and repairs: To keep your ADU in good condition.

  • Insurance: To protect your ADU from potential liabilities and property damage.
  • Property Management: If you are not interested in managing yourself, you may need to hire a property management company. 
  • Property Taxes: ADUs can increase your property’s assessed value, potentially leading to higher property taxes.
  • Utilities: If you provide utilities to your tenants, you must account for those costs.

Does an ADU Affect Your Property Tax?

Yes, adding an ADU to your property may affect your property taxes. Since an ADU can increase the value of your property, it might lead to a higher assessed value, resulting in increased property tax obligations.

You may also need to pay extra taxes if you start perceiving a stream of income from the rental of your ADU! However, many states and cities have implemented laws to limit the property tax impact of ADUs. For example, in California, property tax increases due to ADUs are often limited to 1% of the ADU’s value.

300 Sq Ft ADU rental unit in Chula Vista, CA

And there you have it, whether you’re looking to rent your unit or start constructing one, you can make the most out of your ADU investment by understanding the market dynamics, adhering to regulations, and making informed decisions. 

At Multitaskr, we’re always ready to guide you through the complex world of ADUs. From design to permitting and even property management, our team of experts is prepared to aid you in your real estate journey. Book a free consultation today and kickstart your ADU project! 

Book a Free Consultation to see how you could benefit!

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