How Much Rental Income Can You Expect in the San Gabriel Valley of L.A.?

Income from ADU Rental

When SGV ADU Construction estimates potential rental income for an Accessory Dwelling Unit (ADU) in the San Gabriel Valley of northeast Los Angeles County, it depends on several factors, including the ADU’s size, location, amenities, and local market conditions. Based on available data and regional trends, here’s a breakdown of what you can expect in 2025:

Key Factors Influencing ADU Rental Income

1. Location within San Gabriel Valley: Rental prices vary significantly by city. For example, Pasadena and San Gabriel command higher rents due to proximity to amenities and demand, while areas like El Monte or Baldwin Park may be lower.

2. ADU Size and Type: Larger ADUs (e.g., 2-bedroom, 1,000 sq. ft.) typically fetch higher rents than smaller units like Junior ADUs (500 sq. ft. or less).

3. Amenities and Condition: Modern finishes, separate entrances, parking, and utilities included (e.g., Wi-Fi, water) increase rental value.

4. Market Demand: The San Gabriel Valley’s tight housing market drives demand for ADUs, especially for long-term rentals, as short-term rentals (under 30 days) are prohibited in many areas, including Los Angeles County.

5. Local Regulations: Some ADUs may be subject to rent control (e.g., if attached to a pre-1978 primary residence), which could cap rent increases.

Average Rental Income Estimates

Based on 2025 data from the San Gabriel Valley and broader Los Angeles County:

- Studio or Junior ADU (up to 500 sq. ft.): $1,500–$2,200/month

 - Smaller units, often within the primary home, appeal to single renters, students, or seniors.  For example a junior JADU in the city of San Gabriel averages $1,703/month for a studio.

- 1-Bedroom ADU (600–850 sq. ft.): $1,800–$2,800/month.  These are popular for young professionals or couples, especially in cities like Pasadena or Alhambra.

As an example, San Gabriel 1-bedroom apartments average $1,696/month, but ADUs with modern amenities can push toward $2,500.

- 2-Bedroom ADU (850–1,200 sq. ft.): $2,200–$3,500/month.  These larger units attract small families or roommates, especially in high-demand areas like Arcadia.  San Gabriel 2-bedroom apartments average $2,134/month, with ADUs potentially higher if the are newly built.

San Gabriel Valley Insights

- Average Rent in the Region: The average monthly rent for apartments in the San Gabriel Valley is approximately $2,311. ADUs often align with or slightly undercut this, depending on size and build quality.

For instance:

 - 4% of rentals are $1,001–$1,500 (likely smaller ADUs or older units).

 - 26% are $1,501–$2,000 (common for 1-bedroom ADUs).

 - 39% are $2,001–$2,500 (mid-range 1- or 2-bedroom ADUs).

 - 22% are $2,501–$3,000 (larger or premium ADUs).

 - 8% exceed $3,000 (high-end 2-bedroom ADUs in prime locations like Pasadena).

City-Specific Variations to Price:

 - Pasadena: Higher-end market, with 1-bedroom ADUs fetching $2,200–$3,000/month due to proximity to Caltech and cultural hubs.

 - San Gabriel: Tends to be more affordable, with 1-bedroom ADUs around $1,800–$2,500 and 2-bedrooms up to $2,800.

 - El Monte: Generally lower rents, with ADUs ranging from $1,500–$2,200 for 1-bedroom units, ideal for budget-conscious renters.

Drivers of Demand:

The San Gabriel Valley’s diverse population (1.29 million residents, of which 42% are renters) and proximity to Los Angeles fuel demand for ADUs, especially for extended families, students, or young professionals.

Other Considerations

- The Law Only Allows Long-Term Rentals: L.A. County prohibits ADUs from being used for short-term rentals (e.g., Airbnb) unless permitted before 2017, and even then only in specific cities. This restricts income to long-term leases (30+ days), but stable tenancy provides consistent cash flow.

-Affordable Housing Incentives: Programs like those from San Gabriel Valley Habitat for Humanity offer financing for ADUs rented to low-income tenants, potentially limiting rent to $1,000–$1,500/month but offset by grants (e.g., CalHFA’s $40,000 ADU Grant).

- Property Value Boost: An ADU can increase your property’s value by roughly 100 times its monthly rental income (e.g., a $2,000/month ADU adds ~$200,000 to property value).

- Costs to Consider: There is always maintenance, utilities, and property taxes (which are slightly increased by an ADU’s value) reduce net income. Budget for $200–$500/month as upkeep, especially for older units.

Tips For Maximizing Rental Income

- Research Comparables: Check sites like RentCafe or Apartments.com for local ADU listings to set your rents at competitive rates.

- Upgrade Amenities: Add in-demand features like Wi-Fi, parking, or energy-efficient appliances to justify higher rents.

- Screen Tenants CAREFULLY!: Always follow fair housing laws and use professional lease agreements to ensure reliable renters. The laws in Los Angeles County are strongly pro-renter.  Many of the reasons to evict tenants are no longer legally recognized such as volating lease terms with pets, renovations, smoking, etc. You can no longer make a tenant move to accomodate the sale of the unit.

- Consider Professional Management: If managing remotely, hire a property manager (8–10% of rent) to handle tenant issues.

- Stay Compliant: Verify all permits through the Los Angeles Department of Building and Safety (LADBS) and adhere to local ordinances to avoid fines.

Additional Things to Consider

In the San Gabriel Valley, a well-maintained ADU can generate $1,500–$3,500/month in rental income, depending on size, location, and amenities. Cities like Pasadena and San Gabriel offer higher returns, while areas like El Monte focus on providing affordable options for low-income renters. By understanding local regulations, leveraging incentives, and maintaining your ADU, you can maximize income and property value while contributing to the region’s housing solutions.