One big house, ADU or Duplex?

[OSU Beavers]

I had an inspect on a two year old house this last week. Of course the county computers were down so all I know is one level SFR. I show up, measure the outside, walk through the house and notice that part of the square footage is not accessible from the main entrance. "Oh that's the Mother in Law suite. No interior entrance. We have to go out and knock on her front door." It is a nice 700 sqft with a combined living/kitchen, one bedroom and one bathroom with the laundry. The electricity and HVAC are tied into the main house. I was always taught to exclude any area from the GLA if you had to go out side to reach it.

How should I run this? As one big house, Main house with a separate ADU or as a Duplex?

 

[J Grant]

I had an inspect on a two year old house this last week. Of course the county computers were down so all I know is one level SFR. I show up, measure the outside, walk through the house and notice that part of the square footage is not accessible from the main entrance. "Oh that's the Mother in Law suite. No interior entrance. We have to go out and knock on her front door." It is a nice 700 sqft with a combined living/kitchen, one bedroom and one bathroom with the laundry. The electricity and HVAC are tied into the main house. I was always taught to exclude any area from the GLA if you had to go out side to reach it.

How should I run this? As one big house, Main house with a separate ADU or as a Duplex?

If it is not zoned for it, then it is not a duples, which is an income property.

It sounds like a house where the owners put up drywall to section part off to rent out ? If it is legal zoned for ADU, they created an an ADU , If not legal for ADU, then need to make it subject to remove stove because that is what makes the second kitchen a kitchen. If it is drywall that sectioned a house can either make it a mother in law suite with the sf nof the suite not in main dwelling, or have to make it to opening up the wall if want all the sf under one big house. I'd talk to your client see what kind of loan they are willing to UW if need make it subject to anything and also research the zoning .

 

[sputnam]

It it's not, legal... then, it's one big house with functional obsolescence.

 

[Jerry Bone Jr]

How should I run this? As one big house, Main house with a separate ADU or as a Duplex?

How would it been seen by buyers and sellers ?
The buyers and sellers in the market would probably see it as a great place for granny.
Bottom line, find similar sales and compare apples to apples.

 

[alebrewer]

It's not as simple a question as you pose... it involves a more in-depth than typical H&BU analysis. Which, by necessity, involves an analysis of both the legal, as well as the market, consideration(s) for the property. To wit, what is the zoning, and does that zoning allow for duplex? If not, it makes your job easier. If zoning doesn't allow for duplex, it can't be a duplex. If, however, zoning DOES allow for duplex, or there is no zoning, then you have to look to the market for what the highest and best use would be.

 

[J Grant]

How would it been seen by buyers and sellers ?
The buyers and sellers in the market would probably see it as a great place for granny.
Bottom line, find similar sales and compare apples to apples.

It is not only the way buyers and sellers see it. It has to be legal for HBU. buyers and sellers can love a bootleg ADU as great place for granny, but if ADU is not legally allowed in zoning or grandfathered in then we can not appraise it as such. If not legal for duplex that is off the table too, If your comps are legal apples and subject is illegal then it is comparing a rotten apple....

subject is either a big house with a second kitchen lender might want removed (or stove removed ) and wall opening to restore to one large sf dwelling, or leave as is and then it is a smaller dwelling with attached in law suite ( which is valued on separate line.) Run it by lender because they may have requirements wrt second kitchens or stove (if there is one)

Owners can do whatever they want including illegal use for own houses, but when they apply for a loan, clients/agencies have certain requirements - which affect appraisal. The ways buyer and seller in market see a property is important , and affects marketability/value. But before we get to the valuation stage, we first have to establish HBU/ legal use for what the subject property is.

 

[OSU Beavers]

Oregon has made ADUs universally legal across all residential zones last year including Single Family.

 

[alebrewer]

Oregon has made ADUs universally legal across all residential zones last year including Single Family.

But have they made duplexes universally legal? There's still a distinction, I believe, primarily insofar as whether or not they can be rented, no?

 

[J Grant]

Does the term duplex have a different meaning in different regions? I have heard the term duplex as local idiom for two side by side attached villas-

for an appraisal, Duplex is like a triplex or fourplex - units classified as rental /income property and thus not eligible for a residential loan, an investment loan done on a 1025 small income form not a 1004.

 

[alebrewer]

In Germany they're called half-houses (halbes Haus) - half duplexes, that is. Not sure why, unless it's just some kind of translation idiom. A half house, it seems, would be half a house...