
Worked example 1 · Licton Springs
Rents about $2,800 a month
- Fit check
- Fit unconfirmed — a unit is already under construction on the lot, so the measured clear zone (746 sq ft) may be occupied
- Projected rent
- $2,800 / mo
- Build cost (all-in, typical)
- $518,500 (best $420,000 – recent $616,000)
- Payback year
- beyond 15 years (≈ year 29 on the same assumptions)
- Cash-on-cash (year 1)
- -16.7%
A 2 bed / 1 bath, ~1,000 sq ft DADU on this Licton Springs lot projects to rent for about $2,800 a month and cost roughly $518,500 (best $420,000 – recent $616,000) to build, financed with a HELOC. The detached unit fits the measured clear zone, so new construction is the realistic path. Even so, payback is beyond 15 years (≈ year 29 on the same assumptions) and -16.7% — the debt service dominates the early years. The projection is a planning scenario, not a promise; pull the financing lever first, because cash versus HELOC moves the return more than rent. Re-run it free with your real rate.


