The Genius Of ADU Rental Financing
Let’s compare the purchase of a typical house for $1,200,000 with a 20% down payment
Your total monthly payment would be approximately $5,600
If you buy the Campbell Dr. property for $1,990,000
Your total monthly payment would be approximately $9,200
If you rent out the ADU unit for $5,500 your monthly net payment is now $3,700
The ADU rental can now qualify as a business and based on a value of $500,000 (The building value) can be depreciated over 27.5 years which equates to a monthly deduction value of $1,550. You may also have a deduction of 50% of the total mortgage interest and property tax for an additional deduction of $3,100.
Plus your property tax and mortgage deduction on the main house of $2,900 monthly.
If you are in a 30% Tax Bracket, your monthly payment would be $590!
You will have to pay taxes on the new rental income @ $1,650 a month
Now you own the $2,000,000 property for $2,240 a month!
Your Renter And The Government Will Pay For Your House!