Small is the new green

Increasing environmental awareness along with economic and demographic trends favor smaller house sizes. Many cities are doing their part by updating zoning codes to allow cottage housing and small backyard cottages (detached ADU's) on residentially zoned lots. Seattle and Portland are two cities which allow backyard cottages up to 800 sq. ft. in size. These small houses provide opportunities for families, while increasing housing stock density and diversity. Continue reading for more information about small house design and Seattle's backyard cottage ordinance or contact us to find out if your lot is eligible for a backyard cottage.

backyard cottage - budgeting

how do I establish a budget for my  backyard cottage (detached ADU)?

Choosing to build a backyard cottage is an important long term decision. A good first question to ask when making that decision is how will I establish a budget for the cottage?  While it may be hard to put a value on how a well designed home makes you feel or the value of having a family member living nearby, some qualities are easier to asses.  If that family member is an aging parent who would otherwise be living in an assisted living facility, it is relatively easy to look at the costs of local facilities.  For others building a new cottage may be less expensive than remodeling their existing house to more closely meet their needs. For example, new cottages can incorporate universal design components to assist those with mobility impairments.  Many people plan to use their cottages to generate rental income.  In this case, a careful consideration of the rents in your area and anticipated costs can help you establish a budget range.  Having established a realistic budget based on your needs and values will guide the many decisions that make up the design process.

At microhouse we the local experts in the design and permitting and construction of backyard cottages.  We are here to help our clients in creating houses that exceed their expectations.  Our experience not only results in great houses, but saves our clients time and money, allowing them to allocate their resources to the things that they value most.  We work with top notch consultants and home builders assuring quality and affordability in everything that we do.


 how do I finance my backyard cottage (detached ADU)?

Cash: The easiest way is to finance construction is using cash savings.

Home Equity: A cash out refinance or home equity loans are the most common methods of financing a backyard cottages. 

Construction Loans:  Construction loans have a number of challenges the first is that banks have a hard time valuing backyard cottages. Finding comparable sales of houses with backyard cottages is difficult because there are not enough of them.  This leads banks to value cottages at 70-80% of their cost to build.  Secondly, they require the owner pay 20-30% + soft costs up front before they start to lend money. 

Resources:
Home Equity Loans: Verity Credit Union Joe Lancaster 206-315-6718 or JosephL@veritycu.com.