ADU Buying Checklist For Tualatin Homes

Eyeing a Tualatin home with an ADU for flexible space or steady rental income? You are smart to look, but hidden permit issues, utility limits, and parking rules can turn a great idea into an expensive surprise. This guide gives you a clear, step-by-step checklist grounded in local considerations so you can validate legality, assess the structure, run the numbers, and talk to lenders with confidence. Let’s dive in.

Big decisions to make first

• Legality and permitting: Is the ADU fully permitted and finaled, or can it be legalized? Unpermitted units carry the highest risk.
• Physical suitability: Confirm safety and code elements like egress, ceiling height, and fire separation.
• Utilities and meters: Check capacity for water, sewer, gas, and electric. Note if meters are separate or combined.
• Parking and access: Understand Tualatin rules and practical on-site options before you buy.
• Financial viability: Estimate rent, costs, fees, taxes, and financing terms. Plan for a realistic timeline.
• Risk tolerance: Decide if you want immediate cash flow or a longer-term plan that may include permitting and upgrades.

Confirm permits and zoning in Tualatin

Verify ADU legal status

• Ask the City of Tualatin Planning/Building for building permit records and final inspection sign-offs for the ADU.
• Request any recorded documents that limit ADUs or rentals.
• If the ADU is unpermitted, estimate costs to legalize and whether the work will pass code.

Zoning details to check

• Allowed ADU type on the property’s zoning: attached, detached, or conversion.
• Maximum ADU size, height, lot coverage, and setback limits.
• Whether owner-occupancy is required.
• Short-term rental rules if you plan nightly or weekly rentals.
• Parking requirements or exemptions for ADUs in the applicable zone.
• Whether the property sits in a historic or special overlay district that adds review steps.

Other records to review

• Recorded easements or restrictions that could block new work or access.
• Washington County assessor items that may affect tax valuation with an ADU.

Inspect the ADU’s physical basics

Safety and access

• Separate entrance that is safe, well-lit, and private.
• Egress windows or doors in bedrooms that meet size and sill-height codes.
• Fire separation between units, especially for attached ADUs.
• Stairs, handrails, and lighting that meet life-safety standards.

Mechanical systems

• Heating type and whether the ADU has independent controls.
• Cooling and ventilation, including mechanical ventilation where required.
• Insulation quality and sound separation between units for comfort.

Electrical and plumbing

• Main service amperage and subpanel capacity; confirm the circuit count serving the ADU.
• Smoke and CO detectors in the right locations, properly wired.
• Sewer lateral condition and drainage performance; note any backups or slow drains.
• Water heater size, age, and location; consider if the ADU needs a dedicated unit.

Structure and envelope

• Roof condition, foundation integrity, and signs of leaks, rot, or slope issues.
• Any structural modifications that need permit documentation.
• Accessibility of utility areas for meter reading and maintenance.

Utilities, meters, and local providers

Who to contact

• Electricity: Portland General Electric serves much of the metro; confirm for the address.
• Natural gas: NW Natural or another local provider, depending on service area.
• Water: Tualatin Valley Water District commonly serves Tualatin; verify the specific service connection.
• Sewer and stormwater: Clean Water Services and the City of Tualatin Public Works.
• Broadband: Options may include Comcast/Xfinity, Ziply, or local fiber providers. Check address availability.
• Trash and recycling: City-franchised hauler; verify container placement and pickup.

Metering and capacity

• Determine whether electric and gas are separately metered. Separate meters simplify tenant billing and underwriting.
• Ask utilities about load calculations, panel upgrades, or transformer upgrades if capacity is tight.
• Learn the process and cost to add a separate meter or to submeter if allowed.

Water, sewer, and stormwater

• Confirm the location and size of the sewer lateral and any capacity or reconnection requirements for an added dwelling.
• Ask about system development charges and permit fees that may apply to a new or legalized ADU.
• Detached ADUs can trigger stormwater management; clarify requirements early.

Internet and trash practicalities

• Verify internet speeds and providers for a rentable unit.
• Plan clear routes and storage for trash, recycling, and pickup that do not impede access.

Parking and access in Tualatin

• Check Tualatin’s municipal code to confirm whether ADUs require dedicated parking or if there are exemptions.
• Count usable off-street spaces and measure driveway length and width.
• If a garage was converted, note the loss of covered parking.
• Confirm any on-street restrictions, time limits, fire lane rules, or permit zones.
• Ensure a safe pedestrian path to the ADU with adequate lighting.

Run the numbers: simple ROI worksheet

Use the worksheet below to estimate performance before you write an offer. Be conservative with rents and reserves.

1. Acquisition

• Purchase price
• Closing costs

2. ADU status

• If existing: cost to legalize and any corrective work
• If to be built/converted: hard costs, soft costs, permit fees, utility upgrades, and system development charges

3. Financing costs

• Loan amount, interest rate, loan fees
• Construction loan interest reserve if applicable

4. Annual income and expenses

• Expected gross rent: monthly rent × 12
• Vacancy allowance: 5% to 10% of gross rent
• Property management: for example, 8% to 10% of collected rent
• Owner-paid utilities for the ADU
• Insurance increase for rental use
• Repairs and maintenance reserve
• Property taxes: incremental increase if the assessor revalues after ADU work

5. One-time and recurring extras

• Furnishings if applicable
• Marketing and leasing costs

Key formulas

• Effective Gross Income (EGI) = Gross rent − Vacancy allowance
• Net Operating Income (NOI) = EGI − Operating expenses
• Capitalization Rate = NOI ÷ Total purchase price
• Cash-on-Cash Return = Annual cash flow after debt ÷ Total cash invested
• Debt Service Coverage Ratio (DSCR) = NOI ÷ Annual debt service
• Payback period = Total cash invested ÷ Annual pre-tax cash flow
• Break-even rent = (Operating expenses + annual debt service) ÷ (1 − vacancy rate)

Example snapshot

• Purchase price: $500,000
• Conversion to legal ADU: $60,000
• Expected monthly rent: $1,400 → annual $16,800
• Vacancy 7% → EGI = 0.93 × $16,800 = $15,624
• Operating expenses: $6,000
• NOI = $15,624 − $6,000 = $9,624
• If annual debt service is $6,000 → pre-tax cash flow = $3,624

Talk to lenders early

Bring the property address, ADU details, and preliminary numbers. Use these prompts:

Qualifying and programs

• Will ADU rental income count toward qualifying? What documentation is required?
• How does an existing ADU affect conventional, FHA, or VA eligibility?
• How do appraisers treat an ADU for valuation and comps?

Unpermitted or conversion scenarios

• How does an unpermitted ADU affect approval and appraisal?
• What proof of permitted work is required for garage or basement conversions?

Financing construction or legalization

• Are there construction-to-permanent, renovation loans, HELOCs, or cash-out options for ADUs?
• What LTV limits, contractor bids, contingency reserves, and draw schedules are required?
• Can projected rents be used in underwriting for construction loans?

Underwriting, insurance, and occupancy

• Are there owner-occupancy rules by program type when a property has an ADU?
• Are separate insurance endorsements needed when renting the ADU?

Timeline and closing

• Can the lender allow contingencies for permits or post-closing legalization steps?
• Are reserve requirements different when a property includes an accessory unit?

Neighborhood and rentability checks

• Proximity to transit, employment centers, retail, and services supports rentability. Tualatin has transit access via TriMet lines and commuter connections.
• Evaluate pedestrian access and lighting for the unit.
• Use realistic rent comps from local listings and property managers, and include vacancy and maintenance reserves.

Your action plan

1. Confirm the ADU’s permit status and zoning details with the City of Tualatin.
2. Complete a focused inspection that covers safety, egress, fire separation, and systems capacity.
3. Call utilities early to clarify metering options, capacity upgrades, and any fees.
4. Verify parking requirements and on-site solutions.
5. Build an ROI model using conservative rent and expense assumptions.
6. Speak with lenders about qualifying with ADU income and any renovation financing.

Buying a Tualatin home with an ADU can be a smart, flexible move when you verify the right details. If you want a local, ROI-minded advocate to help you evaluate options, negotiate, and manage the details, reach out to Shelley Lucas for a friendly, no-pressure conversation.

FAQs

What is an ADU and why buy a Tualatin home with one?

• An ADU is a smaller, independent dwelling on the same lot as a primary home, offering flexible living space or rental income when permitted and properly set up.

How do I confirm an ADU in Tualatin is permitted?

• Ask the City of Tualatin Planning/Building for building permit records and final inspection sign-offs, and check for any recorded restrictions.

Do ADUs in Tualatin need separate utility meters?

• Not always; verify with local providers whether separate meters are required or if submetering is an option, and confirm service capacity for added load.

What parking rules apply to ADUs in Tualatin?

• Requirements vary by zone; review Tualatin’s code to see if ADUs need dedicated spaces or qualify for exemptions, and assess on-street limits.

How do lenders treat ADU rental income on a mortgage?

• Many lenders can consider ADU income with documentation, but program rules vary; ask what evidence is needed and how appraisers value ADUs.

How can I estimate realistic ADU rent in Tualatin?

• Gather local comps from area listings and property managers, then apply a vacancy allowance and maintenance reserves for a conservative projection.