- In 2019, Julie Fornasero and her husband, Tim Logan, decided to rent out their primary home.
- The couple moved into a 500-square-foot accessory dwelling unit, or ADU, they put in their backyard.
- Saving on housing, she was able to partially retire at 53 and spends less time monitoring finances.
This as-told-to essay is based on a conversation with Julie Fornasero, 53, who along with her husband, Tim Logan, 49, is renting out their primary home in Marin County, California, while living in an ADU in the backyard. The conversation has been edited for length and clarity.
Prior to the pandemic, I worked in retail as a buyer, and later transitioned into technology, specializing in product management. My husband, Tim, is a technology consultant.
At the time, we commuted daily to San Francisco for work, with the ferry ride taking at least an hour and a half each way. We felt like we were killing ourselves. My husband and I asked ourselves: Do we want to continue with our high-paying tech jobs for the next 30 years or find a way to work less?
In 2017, we decided to restructure our lives. Our two sons had moved out and our home felt huge — we just had so much space. We had the idea of building an accessory dwelling unit in our backyard, with plans to either rent it out or make it our new home.
In 2019, a tenant moved into the main house and we moved into the ADU. Our renter pays us $3,900 each month and we split utility costs. It covers our $2,600 mortgage — which we refinanced in 2020 — and property taxes.
This arrangement has allowed my husband and I to save $5,000 each month. I was also able to retire to some degree and my husband no longer works at an office.
Building an ADU was about saving for our future
In 2010, we purchased our bank-owned home as a short sale for $551,000 with a 30-year loan on the property. We didn't want to sell our house because we were concerned about potential capital gains, which conflicted with our goal of maximizing our investment and planning for retirement.
We didn't want to rent or purchase a new home as Marin is a very expensive county. Today's rents are around $4,000 a month and home prices are in the millions. If you look at real-estate sites, our three-bedroom, one and a half bathroom home is worth about $1.2 million.
In 2017, after California began to relax some of its zoning mandates, we put in a request to our city's planning department to build an ADU, and they granted approval.
We did months of research before selecting Studio Shed, which we chose because of the company's credibility and designs. We strategically situated the ADU to ensure each home has its own yard. The shed has one bedroom, one bathroom, and is 500 square feet and includes a walk-in closet. It cost us $170,000 to build.
We had a good mortgage rate, but during the pandemic they got really low, down to 2.75%. At that point, we had a line of credit for the ADU. So it made sense to incorporate that into the mortgage. And with the lower interest rate that we were getting, we didn't notice much of a difference with our monthly payments.
Now we don't have to watch our finances as closely
Some people don't really want anybody living in their house. My husband and I didn't feel that way, there was no emotional attachment. Our biggest concern was finding the right tenant.
Our current renter was the first person to put in an application and she is everything we were hoping to find. She is a single woman with a young child. We don't interact with her socially, though we are friendly. We like to give each other privacy.
The hardest part about the setup is getting used to the new space and its size. Earlier in the pandemic, it was challenging with my husband working from home. Coordinating his conference calls when I was in the kitchen or vice versa presented some difficulties.
We are really fortunate and have a great tenant. We're living more simply and affordably, and don't have to watch our finances as closely. We also travel more. At the moment, we're in the process of determining a destination where we can have an extended stay.