Susan lives in a trendy part of Portland where there’s a great restaurant scene, tree-lined streets and cute boutiques to walk around.
She’s retired and living comfortably on Airbnb revenue. She built her first accessory dwelling unit in 2013 for $182,000. Following its success, she built another accessory dwelling unit on her daughter’s property nearby.
Susan attributes the decision to build two accessory dwelling units largely to need. Although she loved her career as a Santa Monica hairdresser and later as a Portland midwife, she hadn’t managed to save enough for retirement.
To finance building the units, Susan sold her house and downsized to a more affordable home. She combined the profits from the sale with money she inherited. While the first ADU is built on land Susan owns, the second sits on land owned by her daughter, allowing her to avoid a big down payment on purchasing a second property.
Today, Susan nets 100K off her two investments annually. While she’s still in the process of paying off the second unit, the original unit is past break even and producing a profit.
Breaking Down Susan’s Revenue & Costs:
ADU #1 (PDX Eco Cottage):
2013 Revenue: 17,000 (Partial Year)
2014 Revenue: 35,000
2015 Revenue: 40,000
2016 Revenue: 45,000
2017 Revenue: 45,000
Total Revenue: +182,000
Total Expense: -140,000
Net Profit: +42,000
ADU #2 (ADU Barn):
2016 Revenue: 10,000 (Partial Year)
2017 Revenue: 55,000
Total Revenue: +65,000
Total Expense: -300,000
Net Profit: -235,000
TOTAL of Both Units: -193,000
Susan will have both her units paid off within two years.
The Design Process
When embarking on the design process, Susan was adamant about designing green. She hired, Jack Burns, and architect exclusively known for his energy efficient designs. Burns recommended they begin the design process for each unit on Pinterest.
“On Pinterest, there are many Swedish barns that had anesthetic that I loved. For the Urban Barn, I wanted to do something different, but was influenced by the original garage/barn as a guide,” said Susan.
Through Pinterest, they were able to share inspiration and ideas to determine the exact style of the project.
“There’s a lot of new construction in Portland that is boxy trying to maximize square footage, taking up a lot of the yard,” said Susan. “I wanted it to look like it fit in the old Italian neighborhood and have some greenery around it as well as a patio that guests could enjoy. My inspiration became Rustic Modern.”
In the design of both her accessory dwelling units, Susan found a piece that inspired her and created a look around it.
For the PDX Eco Cottage, it was an iconic retro orange fridge.
“I walked into Sears and saw the Smeg Fridge, the last one, wrapped up and on sale for half price,” said Susan. “I bought it on the spot.”
This bright and funky fridge informed her color pallet and nudged her in the direction of a mid-century style. She finished off the look with some Heywood Wakefield Furniture and a few Ikea pieces. She cautioned that short-term rentals are full of cheap furniture and that design and esthetic makes a big difference in listing appeal. Susan would know, her two accessory dwelling units are booked nearly every day of the year.
Airbnb vs Long Term Rental
When deciding whether to rent her unit on Airbnb vs. long-term rental she did her homework. She evaluated her neighborhood and the market for short-term rentals in her area.
“I thought about renting it long term but decided to take a chance and keep it exclusively for short term,” said Susan. “Reservations came closer to the dates requested but it turned out to pencil out financially to continue it. Incidentally, the market has become a bit saturated in the last year or so and I’ve considered long term rental in winter for about 3 months and may try to do that later this year.”
If you’re interested in vacationing in Portland, you can stay at one of Susan’s beautiful homes here.
Plan, hire, and manage your ADU project with Maxable.
At Maxable, we believe that building an ADU should be fun and exciting. You shouldn’t have to be the one to deal with confusing obstacles like permitting snafus or ever-changing regulations. We’ll be by your side every step of the way and connect you to experienced designers and general contractors in your area to make sure your project goes as smoothly as possible.
Leave the headaches to us! Check your address and see what Maxable can do for your home during a free ADU Planning Call.
