In a city like Los Angeles, where space is limited and the cost of living continues to rise, many homeowners are discovering new ways to make their property work harder for them. Adding a small rental unit on your lot can provide a steady income stream, create housing flexibility, and even increase the overall value of your home.

How to Rent Out Your ADU in Los Angeles

But deciding to rent out a separate unit isn’t as simple as putting up a listing and waiting for inquiries. LA has specific rules, requirements, and tenant protections that every homeowner should understand before handing over the keys. From getting your unit legally approved to setting a fair rent price and screening tenants, there’s a process that deserves thoughtful attention.

This guide breaks it all down step by step—so if you’ve recently added a unit to your property or are planning to, you’ll know exactly what it takes to rent it out the right way.

ADU Rental Landscape in Los Angeles

Los Angeles has made a significant push to support ADU development in recent years. In fact, California passed a series of state laws that limit local restrictions and make it easier for homeowners to build and rent out ADUs. This shift is largely driven by the need for more housing options in a city where affordability is a growing concern.

Many neighborhoods across LA, from Highland Park to Venice, are seeing a rise in rental-ready ADUs. They appeal to a range of tenants—single professionals, couples, students, and even small families—because they often offer more privacy and space than traditional apartments.

If your property includes a legal ADU or you’re planning to build one with rental income in mind, understanding the rental landscape is an essential first step.

Legal Requirements for Renting Out Your ADU in Los Angeles

Before you can rent out your ADU, it must meet the city’s legal standards. This includes compliance with zoning regulations, permit approvals, and, in some cases, tenant protection laws.

Zoning and Code Compliance

Your ADU must comply with local zoning and building codes. While state law has eased many restrictions, LA still requires:

• Minimum and maximum unit sizes
  
• Adequate setbacks from property lines
  
• Building height restrictions
  
• Fire safety and structural codes
  

It’s also important to make sure your ADU has a separate entrance, proper ventilation, and plumbing systems.

Permits and Certificates

To rent your ADU legally, it must be fully permitted and receive a certificate of occupancy. This verifies that your unit is safe for residential use. If your ADU was constructed without permits, you’ll need to go through the legalization process before renting it out.

Rent Control and Tenant Rights

Some ADUs in LA may fall under the Rent Stabilization Ordinance (RSO), depending on when the primary residence was built and other factors. While newer ADUs are often exempt from rent control, you should still:

• Review local rent increase limits
  
• Understand just-cause eviction rules
  
• Provide legally required disclosures
  

When in doubt, it’s a good idea to consult a local housing expert or legal advisor familiar with LA’s tenant protections.

Preparing Your ADU for Tenants

Once the legal aspects are sorted, the next step is getting your unit ready to welcome tenants. A well-prepared unit will not only attract more interest but may also allow you to command a better rent.

Design and Layout Considerations

While many homeowners build ADUs for family use, rentals should be designed with tenant comfort and privacy in mind. Here are a few practical suggestions:

• Install a private entrance for the ADU
  
• Include full kitchen and bathroom facilities
  
• Add storage areas where possible
  
• Use neutral colors and durable finishes
  

Small touches like window coverings, thoughtful lighting, and quality flooring can make a big difference when showing the space to potential tenants.

Utilities and Maintenance

Decide whether your ADU will share utilities with the main home or have separate meters. In many cases, shared utilities are acceptable for long-term tenants, but separate metering gives more control and clarity for billing.

You’ll also want to determine how maintenance issues will be handled. Setting expectations upfront—especially in writing—helps avoid confusion down the road.

Furnished or Unfurnished?

Furnished rentals may attract short-term tenants, such as traveling nurses or professionals, while unfurnished units are more appealing to long-term renters. Consider your target audience before making a decision.

Setting a Competitive Rent Price

Setting the right rental rate for your ADU is crucial. Too high, and it might sit vacant. Too low, and you may leave money on the table.

Factors That Affect Rent Pricing

• Location – Neighborhoods like Echo Park or Silver Lake may command higher rents than areas further from the city center.
  
• Size and amenities – A larger unit with a washer/dryer and private yard space will rent for more.
  
• Furnishings – Fully furnished units typically allow for higher monthly rent.
  
• Lease terms – Shorter leases (e.g., 3–6 months) may offer more flexibility but sometimes lower income consistency.
  

Researching Local Rents

Use sites like Zillow, Craigslist, and Apartments.com to see what similar ADUs or studio apartments are renting for in your area. Keep track of pricing trends and consider speaking with a local property manager for added insight.

Marketing Your ADU to Potential Tenants

With your unit ready and priced appropriately, it’s time to find the right tenants.

Write an Effective Listing

A clear, honest, and detailed rental listing goes a long way. Highlight key features such as:

• Private entrance
  
• Full kitchen and bathroom
  
• On-site parking or street access
  
• Proximity to public transit or schools
  

Photos should be high quality and showcase the best parts of your ADU. Natural lighting, wide-angle shots, and tidy spaces always perform well in listings.

Platforms to Consider

Depending on your rental goals, you might choose from:

• Zillow – Broad audience, long-term rentals
  
• Craigslist – Local reach, easy to use
  
• Apartments.com – Good for multi-unit marketing
  
• Airbnb – If short-term rentals are allowed in your area
  

Each platform has its pros and cons, so choose based on your target tenant type and how much effort you want to put into managing inquiries.

Screening Tenants and Signing Leases

Tenant screening is one of the most important steps in the rental process. A little due diligence can save a lot of trouble later on.

What to Look For

• Proof of income or employment
  
• Credit history and background check
  
• References from previous landlords
  
• Clean rental record
  

You should also ensure that your lease agreement includes all essential terms, including:

• Monthly rent and due date
  
• Security deposit details
  
• Pet policies, smoking rules, and guest policies
  
• Maintenance responsibilities
  
• Length of lease and renewal terms
  

Using a standardized lease template approved for California is a good place to start, but it may be wise to have it reviewed by a real estate attorney.

Being a Responsible Landlord

Renting out your ADU means stepping into the role of a landlord, with certain responsibilities to your tenants and to the law.

Ongoing Duties

• Address maintenance requests promptly
  
• Keep the property in safe, habitable condition
  
• Provide necessary notices before entering the unit
  
• Respect tenant privacy and legal protections
  

Developing a system to handle communication, rent collection, and upkeep will help things run more smoothly over time.

Working With Nestadu

At Nestadu, we’ve helped countless homeowners across California build ADUs that serve as excellent rental units. From the first consultation to the final inspection, our team ensures that your ADU is built to local code, thoughtfully designed, and ready to meet the expectations of future tenants.

Whether you’re in the early stages of exploring a rental ADU or you’re ready to break ground, we’re here to help guide you through the process with clarity and care.

Final Thoughts

Renting out your ADU in Los Angeles offers a practical way to earn supplemental income while adding long-term value to your property. That said, success depends on careful planning—from legal compliance to tenant management.

By approaching the process thoughtfully and staying informed about local requirements, you can create a rental that benefits both you and your future tenants.

If you’re considering building or renting an ADU, get in touch with Nestadu today to take the next step toward making the most of your property.