Small Spaces, Big Potential: Designing Tiny Living Spaces for Maximum Impact

Derek Sherrell “That ADU Guy” shares some of the best ways to maximize space while creating an ADU rental property so charming, your tenants won’t want to leave.

Designing for small living spaces requires creativity and practicality. The challenge of crafting a functional and aesthetically pleasing living space within a limited square footage has led to the emergence of innovative design principles that you can leverage to make your Tiny Home or ADU feel remarkably spacious. Here are a few ways to employ them, tailored specifically for house-hackers, DIY builders, and real estate visionaries with a passion for turning small spaces into income generators

Open Concept, FTW

The concept of open layouts is a small space designer’s best friend. One layout Derek has perfected over time consists of a simple rectangle with an open floor plan designed to maximize natural light and elevate the overall ambiance. A single wall galley kitchen where cooking, plumbing, and mechanical infrastructure gets strategically located along a single wall (a cost savings measure) is set opposite to a bedroom that can be closed off using a pocket door. Pocket doors allow for privacy when needed, but when open, they improve sightlines and create the feeling of spaciousness by allowing sunshine to pour in from all sides.

Vaulted Ceilings: Elevating Space

Vaulted ceilings are a key architectural feature that can instantly transform a cramped interior into an expansive haven. By emphasizing vertical space, vaulted ceilings draw the eye upward, creating a sense of openness and grandeur. The upward sweep of the ceiling not only adds visual interest but also enhances natural light distribution. This effect is particularly impactful in small living spaces, where every inch matters. The additional height also allows for creative storage solutions, such as lofted storage areas, optimizing the use of space while maintaining an airy atmosphere. Derek is a huge fan of the storage loft, a necessity for him in each project and always accompanied by a quick and easy-to-build DIY ladder. Watch: How To Build A Custom Loft Ladder For Your A Frame Cabin, Tiny House or ADU.

Color Palette and Tiny Home Vibes: The right colors can transform your ADU into a cozy retreat 

Choosing the right color palette is fundamental in small space design. Light, neutral hues, such as soft whites, pale creams, and gentle greys, play a pivotal role in creating an illusion of expansiveness. These colors reflect natural and artificial light, brightening the space and erasing the boundaries between walls. A light palette not only visually enlarges the area but also imparts an elegant and timeless ambiance. Integrate subtle variations in shades to add depth and prevent monotony, keeping the interior engaging and inviting.

Strategic Windows: Framing Space

Windows are more than mere openings; they are strategic design elements that can dramatically impact the perception of space. Integrating windows on every wall floods the interior with abundant natural light, reducing the reliance on artificial lighting and casting away shadows that can make a room feel closed-in. Moreover, thoughtfully positioned windows create a visual connection with the outdoors, seamlessly merging indoor and outdoor spaces. You can also consider incorporating a sliding patio door. The wide patio door not only enhances the view but also tricks the eye into perceiving the interior as larger than it actually is.

As the ADU trend continues to spread from Oregon and California out across the US and abroad, it’s crucial to wield these design principles with precision to create living spaces that defy their physical limitations. Vaulted ceilings, light palettes, and windows that open up the interior are instrumental in making a small living space feel expansive and inviting. By embracing open-concept layouts, you can craft a home that embodies both comfort and style. So, whether you’re a seasoned builder or a passionate DIY enthusiast, these principles offer a blueprint for embracing the ADU movement and designing small living spaces that truly shine.

Using Your ADU as a Rental? Here’s What You Need to Know

July 27, 2022 by Jenna Hall, Redfin

1. Always do your due diligence on potential tenants

The one thing we recommend to our customers is for them to do their due diligence on their future tenants. Let’s be honest; everyone can be on their best behavior for a 10-minute interview; however, documents never lie. We recommend asking your future tenants as part of the screening process for their three most recent pay stubs, a copy of the credit report, three references from previous landlords, and the current employer’s phone number to ensure they’re still working. Also, slowly saving the profits from the rental to about 6 months’ worth of rent in a separate account is a great idea. That way, if things go sideways with your tenants, it wouldn’t affect you that much. – The ADU Guru

one thing we recommend to our customers is for them to do their due diligence on their future tenants. Let’s be honest; everyone can be on their best behavior for a 10-minute interview; however, documents never lie. We recommend asking your future tenants as part of the screening process for their three most recent pay stubs, a copy of the credit report, three references from previous landlords, and the current employer’s phone number to ensure they’re still working. Also, slowly saving the profits from the rental to about 6 months’ worth of rent in a separate account is a great idea. That way, if things go sideways with your tenants, it wouldn’t affect you that much. – The ADU Guru

2. Check with your city’s planning department

Because many of the cities that legalized ADUs did so to boost the supply of affordable housing, some frown on or have explicitly banned homeowners who use their ADUs as short-term rentals. If you want to use your ADU as a short-term rental, you might need to obtain a business license and meet certain criteria set by your local government. Just in case, be sure to check with your city’s planning department before listing your ADU on Vrbo or Airbnb. – Torii

3. Attract your ideal tenant 

When renting out your ADU, consider this: the setup, design, and feeling of independence are what allow property owners to create a space for their tenants that truly feels like its own. It’s much easier to attract your ideal tenant than it is to find them – we recommend creating a private and luxurious space that can fit a small family. We think ADUs should be a fully-functional home that feels just like any other home, just a little more cozy. – Framework FirstSalinas, CA

For your ADU to be the perfect rental property, you must have high demand, low supply, and a well-managed product. Tenants want the same things homeowners want: A good location, privacy, custom home amenities, and the ability to have a pet. I have found that many renters are looking for stand-alone ADUs with an in-unit washer/dryer, a dishwasher, and some outdoor space. – Derek Sherrell, That ADU Guy

4. Create a strong relationship with your tenant

If you’re going to rent out an ADU and share your backyard it’s vital to know what you want, and know the tenant you’re going to be sharing space with. A great tenant/landlord relationship makes everything else about managing the ADU easier. Invest time in building that relationship, and you’ll have less vacancy, less to worry about, and maybe even make a friend. – Coram HousesDurham, NC

5. ADU rentals are a great way to earn passive income

Would you like to have an additional $1,500 or more in monthly passive income? Due to increased housing demands, rental properties are at a record high. Instead of growing grass in your backyard, envision a money tree that blossoms $100 bills at the beginning of every month. – D A Holt General Engineering

An ADU can earn you income to supplement your mortgage payments, retirement savings, or vacation fund. It’s easy to see why generating an income stream from renting out an ADU can be a smart move. However, keep in mind that it does require due diligence and careful oversight since regulations for short-term rentals vary by location. – MHBO.com

6. Create an environment that retains tenants long-term

Even though rentals are in demand, creating an environment that retains tenants long-term is important. Things like new paint, wood floors, stainless steel appliances, and stone countertops can go a long way. Also, become familiar with landlord regulations for your area and vet candidates thoroughly for income and compatibility. A difficult or non-paying tenant can cost a lot of time and money, not to mention, in the case of an ADU, they literally live next door. – Windy City Builders

adu interior
7. Focus on quality and updated features

To get the most value out of renting your ADU, your ADU must feel and be spacious with great quality and updated features to ensure satisfaction from your tenants. Builders like AKD Homes can design-build the exact size and quality you desire to assure you get the most out of your ADU. – AKD HomesHayward, CA

8. Consider a manufactured home ADU

If you’re looking to maximize your return on investment, we suggest that you consider building a manufactured home ADU. The cost of the manufactured solution is less than half that of conventional construction and can yield a net ROI OF 12%. – Sonoma Manufactured HomesPetaluma, CA

9. Know the rules and how to interpret them to your advantage

Each council has different rules for granny flats (ADUs), so it’s vital that property owners check the requirements for building on their property. This can be a complex process as some councils can be reluctant to provide specific answers to your questions. Since we know the rules and regulations, we also know how to interpret them to our client’s advantage. For example, some councils restrict the size of ADUs but seldom limit the size of decks, patios, or balconies. So, we encourage clients to make them as big as their budget permits and position them off the living room. This helps with the indoor/outdoor transition and makes a small space feel larger and more livable. – Granny & Co. Homes

There are various ADUs available, and whether or not you can use your ADU as a rental all depends on local code and building zones. An ADU can be an addition, attached, detached, above the garage, or even a basement conversion. All of these can easily be used as a potential rental unit. However, ADUs typically cannot be sold as separate units and must remain an “accessory” on your property. – Gregg Camp, Santa Cruz Realtor®

10. Stand out from other hosts

We focused on the Accessory Dwelling Unit market because of the options ADUs create as rentals, a place for Mom, the boomerang college kids, added remote workspace, or a quiet place for you. A key to a good listing is fabulous photos taken with a real camera, maybe even by a photographer. Separate yourself from other hosts by creating a comprehensive binder stored on the desk or countertop that includes operating instructions for the entire DADU. Also, stock the unit well, from cooking utensils to a quality bed, and lastly, don’t forget the toilet paper. – Michael Murray, Founder of Ballard Backyard CottagesBallard, WA

11. Be sure to give your tenants privacy

Our advice for successfully renting your ADU can be summed up in a popular song lyric from the band Offspring in the mid-’90s, “Keep ‘Em Separated”. For you and your tenant’s comfort, privacy and security, strategically separating your main home from your rental unit is key. This isn’t necessarily focused on distance, which may be logistically or legally prohibitive, but includes strategic landscaping, building position, window placement, and even a water feature for a sound barrier. – Watershed StructuresSnohomish, WA

12. Educate yourself to be a fair and empathetic landlord

ADU owners have a unique opportunity to do their part in alleviating the housing crisis while also building wealth for the family that owns it. Two major ways to be a fair and empathetic landlord are to one, educate oneself on the local and state laws protecting landlords and tenants, in addition to historic tenant biases against certain communities. Second, learn about available local and federal programs that assist ADU owners in placing tenants, as well as supporting those who are building ADUs, and utilize them to be most effective. – Inclusive Action for the CityLos Angeles, CA

13. Tailor your rental agreement to your specific situation

Your tenant will live on your property, so you may want to include specific details about any shared space. That way, you can ensure your lifestyle requirements are aligned and avoid any sticky situations. Don’t want to hear loud music at 2 am? Put it in your rental agreement. – Casita CoalitionLos Angeles, CA

Post originally published at Redfin: https://www.redfin.bcom/blog/adu-rental-tips/