- Eugene Chu, 52, owns a five-bedroom property that he rents out to UC San Diego students.
- He built a two-bedroom accessory dwelling unit in its backyard to bring in extra cash.
This as-told-to essay is based on a conversation with Eugene Chu, 52, a Bay Area field-operations manager for InterVarsity Christian Fellowship, a college faith organization. He has an investment property in San Diego and recently built an accessory dwelling unit on the lawn. The conversation has been edited for length and clarity. Insider has verified Chu's income.
I own a rental property with my friend and business partner in San Diego. It's about 15 minutes from the campus of the University of California, San Diego. I graduated from there many years ago. We rent our property exclusively to college students.
Our property has a large side yard and backyard. We first looked into putting an accessory dwelling unit on the property years ago, but we couldn't build it until California loosened its laws around ADUs three years ago.
In March 2021, I found Villa — a company that builds custom prefabricated ADUs and helps homeowners with getting a permit from the city. Villa was very responsive as I started the process. We finished the unit in spring, and in June, the new tenants moved in.
From my perspective, it's an investment. It works out well for renting to college students, and it's relatively affordable.
I paid $250,000 in cash to build the unit, and we rake in $2,500 a month by renting it out
The ADU is about 655 square feet and has two bedrooms and a bathroom. The main house and the ADU share a lawn.
It's in the side yard of the property. When you walk up to the driveway, there's a gate to the left of the garage that opens to the property. It has its own address and mailbox, and it's enclosed by a fence.
My cost at the time was about $250,000 in cash. We charge about $2,500 in rent, so that's about a 10% return yearly on my capital — 10% return is good for any year.
It also provides much-needed housing in the area.
7 members of UCSD's women's water-polo team live on the property
As it turns out, I've been housing the UCSD women's water-polo team. Basically, half the team is living there on the property: Five people live in the main house and two in the ADU. So there are seven of them on the property.
It's a fun part of this story. I think it works out for them because they like to be close to each other and their schedules are all the same, so they can carpool. The two renters in the ADU have their own living area, but they share the living room in the main house because it's obviously a lot bigger.
And for me, as the owner-investor, it works out really well. I'm hoping the team will continue to rent the housing.
The state made the right move allowing for ADUs, but it's still hard to get cities like San Diego on board
From an owner's perspective, it feels like you need to fight the city so you can build.
I understand that in neighborhoods, maybe you don't want it to be denser. Maybe cities think they're protecting the value of their neighborhoods by making them look nicer and less dense, with fewer cars on the street — I do understand that perspective.
In San Diego, near UCSD, people want to live there, and density needs to be allowed for it to happen. I think that's the difficulty you see everywhere.
Still, even though it's difficult to work with cities, I think the state has done a good thing to allow homeowners to build in their backyards. Working with Villa made it easier for me. I don't work with the city to apply for permits for a living, and Villa got the process done.