New Avenue - Building for Tomorrow

EMERYVILLE, Calif. - Sept. 18, 2014 - PRLog -- In a study on the impacts an accessory dwelling can have on their owners and occupants, New Avenue discovered that people who add an accessory dwellingenjoy life-changing financial and social benefits. Respondents consisted of eighty-six respondents ranging in age from 30-75.  New Avenue discovered the following major findings:

1. Potential Profits from renting out an accessory dwelling:
An average family in the San Francisco Bay Area will realize over $1,000,000 in economic benefit during a 25-30 year period by building an accessory dwelling.

Basic Assumptions:

• $250,000 Investment, financed with a 30-Year fixed mortgage at 4.25% interest rate

• 30% Immediate equity growth based on $400 square foot sales prices of      comparable homes; in addition to a 3.7% annualappreciation rate of the    accessory dwelling
• Property taxes are 0.5% of the development cost of the accessory dwelling
• Maintenance costs are 1.0% of the market value of theaccessory dwelling
• Rentalincome is based on $2,250 a month with a 3% annualgrowth Rate

Based on these assumptions, we calculated that the equity valueof an accessory dwelling would be $932,000 dollars at the end of the mortgage. Cumulative rental income after paying all mortgage, property tax, and maintenance expenses is $640,000 at the end of the 30 years. When combined, the asset appreciation and rental income cross the $1,000,000mark in year 23.

2. Senior Care Savings:

Many homeowners build an accessory dwelling so they can comfortably downsize and age in place. The New Avenue study found that within just five years there is an estimated $234,000 in savings by going the New Avenue accessory dwellingroute compared to nursing home costs.

BasicAssumptions:

•$250,000Investment, financed with a 30-Year Fixed Mortgage at 4.25% interest rate

SeniorCareData:

•Private Room in Nursing Home - $83,950.00(4% annualgrowth in costs from 2008)
•Assisted Living Facilities - $41,400(5% annualgrowth in costs from 2008)
•Hourly Home Care - $27,000(based on $13.50/hrrate for 40 hours a week)