#5 Can I Rent Out My ADU Right Away?

Welcome to the final post in our series covering the 5 most common questions homeowners ask when building an ADU in Los Angeles!

At Pacific Point Builders, we’ve walked countless homeowners through the ADU process—from idea to income-producing property. If you’re thinking of using your ADU as a rental, you’re not alone. In fact, this is one of the biggest reasons people build ADUs in the first place.

Let’s break down what you need to know before renting out your new unit.

✅ Yes, You Can Rent Out Your ADU—But There Are Rules

In most cases, you can begin renting out your ADU as soon as it receives its Certificate of Occupancy (CofO) from the city. After passing the final inspection with the Building and Safety Department, the city typically updates their system to “Ready for CofO” within about 2 business days. From there, the Certificate of Occupancy is usually issued within a week, and you can expect to receive the physical document by mail within 2–3 weeks after that. If you need the certificate sooner, you can contact the city directly and request a digital copy via email.

But depending on your city, zoning, and the type of ADU, there are a few important guidelines to keep in mind.

🔒 Short-Term Rentals vs. Long-Term Rentals

Los Angeles City and many surrounding areas have restrictions on short-term rentals (like Airbnb or VRBO):

• Short-term rental (under 30 days): Generally not allowed unless the ADU is your primary residence and registered as a Home Sharing Unit.
• Long-term rental (30 days or more): Allowed in most areas, with no registration required beyond typical lease agreements.

Pro Tip: If you plan to rent your ADU for passive income, aim for long-term tenants to stay compliant and avoid legal headaches.

🏠 Do You Have to Live On-Site?

Under state law, as of 2020, cities cannot enforce owner-occupancy rules for ADUs built between 2020 and 2025. This means:

• You do not have to live on the property to rent out your ADU (or the main house).
• You can rent both the primary residence and the ADU if you choose.

However, this exemption expires in 2025, and new rules may go into effect after that. We recommend checking with your city or asking us to confirm your specific case.

💼 Lease Agreements, Utilities & Insurance

Once you’re ready to rent, make sure you’ve got the basics in place:

• Separate entrance (required by code)
• Lease agreement (use a CA-based legal template or hire a professional)
• Utilities: Decide whether to sub-meter or include utilities in the rent
• Insurance: Add rental coverage to your homeowner’s policy or get landlord insurance

💰 Want to Maximize Rental Income?

We can help you design your ADU with rental goals in mind—whether that means a studio with privacy, a 2-bedroom for families, or a high-end unit with premium finishes. The layout, lighting, and even appliance choices affect how much rent you can charge.

📌 Wrapping Up the Series

Thanks for following along with our 5-part blog series on the most common ADU questions! Whether you’re just starting to explore the idea or ready to build, we hope this gave you clarity and confidence.

Ready to turn your backyard into income?
Book a free consultation with our team and let’s talk numbers, layout, and next steps.