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Francie & Michael Royce’s ADU: A Retirement Plan

Royce ADU

Quick Facts

  • Setting: urban
  • City: Willamette Heights, Portland, OR
  • Type: basement
  • Use: long-term rental
  • Square Footage: 650
  • Year Built: 1908
  • Year ADU Created: 2006
  • Owners: Francie & Michael Royce
  • Builders: Spectrum Construction
  • Total Cost: $250,000

“Our ADU was part of my retirement plan. We have a lot of space and it seemed like it was going to waste. This is a desirable neighborhood so I knew we could charge market rents.” –Francie Royce

Francie Royce was familiar with ADUs through her work as a city planner for Portland, OR. She had just retired when she and her partner Michael began construction on their ADU, but they began planning and saving for it long before. When asked about her reasons for building an ADU, Francie jokes: “I wanted a Jacuzzi bathtub so I needed a source of income to pay for that!” When she and Michael worked the numbers, they realized that the ADU could bring in some supplemental income for their retirement – and that Jacuzzi tub.

The couple was inspired by other ADUs in their neighborhood. However, they knew that some of them had not been permitted and constructed legally. Michael and Francie were committed to building a proper ADU so that it could be rented out legally.

“There are big houses in my neighborhood and they’ve been able to convert some space into apartments. People are able to rent them but they wouldn’t be able to sell their homes as an ADU. I guess some people might not think it would pencil out. Or they don’t have time. A lot of people don’t know about the process, that you can do it legally. A lot of people don’t have the vision that you can take a part of your home and turn it into an apartment without them being part of the family.” –Francie Royce

Francie and Michael had three primary design criteria for their ADU. First, it had to be easy to maintain. Second, it had to be sustainable – both financially and environmentally. Finally, it had to be a pleasant space to call home. Francie explains she was her own litmus test:

“I wanted it to be a nice enough space that my husband and I could live there and rent out the rest of the house. It turns out we haven’t done that, but we wanted the possibility. The outside wall looks out onto the garden. I wanted to open up the back wall with French doors and windows and build a deck so the tenant has a nice view to the outdoors. I wouldn’t want to own property I wouldn’t want to live in myself.” –Francie Royce

Michael and Francie used savings to fund their ADU and they hired an architect named Laura, who helped them transform their ideas for the ADU into a set of workable plans. Many of their original ideas remained, but there were a couple significant changes.

“The ADU has a separate entrance. I had originally envisioned the front door of the apartment being on one side of the house, but the architect pointed out the advantages of having the entrance on the other side of the house.” –Francie Royce

The design they landed on is a split-level one-bedroom apartment. The great room is on one level and there are two steps up to a bedroom, bathroom, and storage. The ADU features energy-efficient appliances, a radiant floor heat system, and durable, easy-care finishes, including tile and floating wood floors. Francie is particularly pleased with how much light the ADU has now that they’ve opened up the back wall with French doors and floor-to-ceiling windows. However, her favorite feature is the radiant floors.

“The highlight of the build for me was one really cold day. The radiant heat was on and I went in the area where the carpenters were working and I thought, ‘Oh, this is going to be nice and cozy!’” –Francie Royce

Selecting the finish materials was time-consuming and Francie believes it’s important for potential ADU owners to be aware of the time commitment of a major renovation project, such as converting the basement into an ADU.

“It’s construction. It does take time to work in all the different elements. Picking the knobs and finishes takes time. You’re not going to have a developer do that kind of work. You’ll do a lot of the work yourself. Fortunately, we have a really good contractor, Jerry who is the owner of Spectrum. He had done work on our house previously. He’s really good at working in older homes to make the ADU consistent with the rest of the house.” –Francie Royce

However, Francie also notes that it’s important to not sweat the small stuff. There are, of course, big decisions to make, but the smaller decisions aren’t worth staying awake at night.

“If I had it to do over again I wouldn’t fret so much about doorknobs and kitchen cabinets. Once you have them put in they’re fine!” –Francie Royce

The biggest challenge for Michael and Francie was the cost of their ADU. They constructed the unit before Portland created its temporary waiver of System Development Charges for ADUs, so the fees were a large portion of their overall cost. (Fortunately, the SDC waiver has been extended though July 2016.)

“Having the development fee waived makes very good sense if you want to encourage ADUs in the city. When you’re considering building an ADU, keep in mind that the quality of the construction and the amenities of the space are going to vary a lot. I think it’s important that it if someone is going to offer housing it needs to be clean and well-designed. Someone renting an ADU is looking for less expensive housing in your neighborhood. In our neighborhood the homes are generally owned so the only way to rent in this neighborhood is to rent an ADU. We live near Forest Park which is a great amenity, so we’re able to charge premium rents.” –Francie Royce

For Francie and Michael, like so many other ADU owners, income potential is a driving factor in the decision to build an ADU, but the creation of community is a primary benefit of having one.

“Income is the obvious benefit of having an ADU, but the other is that if I go away for a few days I feel like the house is safer. Our tenant is a circus performer. She’s very high energy, enthusiastic, and she travels a lot. If we’re going to be gone and I forget that we have a package that’s going to come, I let her know and she’ll bring it in. We help collect packages.” –Francie Royce

Francie explains that when she and Michael first had a tenant living in their ADU they weren’t quite sure what the relationship would be.

“At first I felt like I had to be her mom. That was something I had to get over. Now when I see her it’s like seeing another neighbor. She’s a great tenant. She has a dog and a rabbit. The thing we share is getting the recycling and compost barrels out.” –Francie Royce

Francie says she and Michael haven’t had any big surprises with their ADU. Their least favorite aspect of having an ADU is managing another property, but Francie emphasizes that it’s still worthwhile.

“For instance, if I get a call that an outlet in the bathroom doesn’t work, then I end up dealing with that, making arrangements to have it fixed. But that’s a minor inconvenience, just another task to do.” –Francie Royce

Francie and Michael have enjoyed living in their home and renting out their ADU for the past 8 years. They have now purchased property at a sustainable community they’ve created called Ankeny Row and will be transitioning to their new home in the coming months.

So what advice does Francie have for homeowners considering creating an ADU on their own property?

“Think about how you can create a living space that is separate if they want to rent to a totally unrelated person. For resale I would also figure out a way to do it so that if someone wanted to reincorporate that space into the home it could be reincorporated. That way if someone who bought your home and wanted the extra space but didn’t want an ADU they could make it work. I had a door framed within the wall between the sheetrock that could be cut through in case someone did want to reincorporate it.” –Francie Royce

About linamenard

Hi. My name is Lina Menard and I'm a small house dweller, designer, blogger, and builder. I'm currently collecting ADU Case Studies for AccessoryDwellings.org. Through my company Niche Consulting LLC, I help people design and build the home (and life) of their dreams! I also tell my stories about simple living in small spaces - like a travel trailer, a yurt, a backyard cottage, and tiny houses on wheels - at This Is the Little Life.

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