Rent

Understand what it takes to rent out your ADU
Consider affordable pricing for your unit
Make a long-term plan for the care and upkeep of your ADU

RENTING RESOURCES

ADU GUIDEBOOK →

A step-by-step guide to building an ADU in Newport Beach

ADU Exercises

PROJECT TIMELINE

Most ADU projects take 12-18 months to complete, but some extend to 24 months or more.

RENTING FAQs

Here are a few of the most frequently asked questions about renting your ADU. See the content below and our ADU Guidebook for more guidance, resources, and tips for all steps of the process.

As soon as the final inspection is complete, your ADU is ready for occupants! If you’re renting it out, though, you’ll need to ensure you have utility services, an address established, and other preparations. See below for more responsibilities of being a landlord.
Renting an ADU comes with many responsibilities, including understanding local and state housing laws, executing a lease, finding and managing a tenant, and maintaining a rental property. It’s important to understand the laws as they may affect things like future rent increases, changing use over time, evicting tenants, and moving family into the unit.
See our Guidebook for resources on understanding rental laws, tenants’ rights, and more, and our Exercises for help with your lease terms.
No. Newport Beach properties with ADUs and JADUs must file a deed restriction agreeing that the unit will not be used for short-term rentals (less than 30 days). This discourages the listing of ADUs on popular websites like Airbnb and VRBO and promotes them as a means to increase housing stock for the diverse needs of county residents. More information about ADU deed restrictions can be found in the Guidebook.

RENTING YOUR ADU

After your final inspection, your ADU is ready for move-in! This might be you, a friend, a family member, or a tenant. There are many benefits to sharing your property with a tenant, but renting also comes with many responsibilities – make sure you have a good sense of the laws governing rental agreements and think about the issues that might arise from welcoming a new neighbor into your space.

BEFORE YOU BEGIN

Confirm the new street address for your ADU with the Planning Division. You’ll need this street address to establish utility services and to set up your lease.

Complete preliminary steps

Prepare to rent your unit by getting insurance, setting up utilities, and developing a plan to handle the finances.

Understand rental laws

You will need to understand all the laws related to being a landlord, especially with regard to discrimination. For an overview of California laws that regulate certain aspects of the rental housing market, review California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities, published by the California Department of Consumer Affairs. You should also talk to city staff about regulations that might apply.

The City of Newport Beach works with the Fair Housing Foundation to provide fair housing resources for both property owners and tenants, including guidance on writing a lease agreement and managing disputes. Visit their website for more information, including details about their very helpful workshops and events for tenants, landlords, managers, and others involved in rental housing.

Fair Housing Foundation

Set the rent

Maximizing the rent is often not the only consideration – setting a fair rent a bit under market rate will help you attract and keep good tenants. Consider pricing your unit so that it is affordable for the local workforce and families who may not be able to afford high rents in the city. A unit is considered affordable if a household is paying less than one-third of their income on their housing costs; see current average incomes for Orange County and Newport Beach on the City’s website. Many homeowners are motivated to rent their ADU affordably to community members because they serve essential roles and often have difficulty finding housing that meets their needs. If you financed your construction with a loan, consider the loan length, interest rate and any reserve funds you have as well.

Write your lease

Make sure your lease (or rental agreement if it is month-to-month) clearly identifies all the expectations for you and your future tenant. See our Exercises for help planning your lease.

ADU Exercises

Find your tenant

Research how to successfully advertise your unit and select a good tenant. Typical methods for advertising rentals in Newport Beach include Craigslist and other online listings as well as posting a “for rent” sign on your property. Make sure to reference local rules about real estate signs, which limit signs to one per property and certain size and appearance characteristics.

Manage your rental unit

Think through a long-term plan for the care and upkeep of your ADU, how shared responsibilities will be split, and how to address any issues that might occur with your tenant.