New Avenue -- Building for Tomorrow

• $250,000 Investment, financed with a 30-Year fixed mortgage at 4.25% interest rate

• 30% Immediate equity growth based on $400 square foot sales prices of comparable homes; in addition to a 3.7% annual appreciation rate of the accessory dwelling

• Property taxes are 0.5% of the development cost of the accessory dwelling

• Maintenance costs are 1.0% of the market value of the accessory dwelling

• Rental income is based on $2,250 a month with a 3% annual growth Rate

Based on these assumptions, we calculated that the equity value of an accessory dwelling would be $932,000 dollars at the end of the mortgage. Cumulative rental income after paying all mortgage, property tax, and maintenance expenses is $640,000 at the end of the 30 years. When combined, the asset appreciation and rental income cross the $1,000,000 mark in year 23.

2. Senior Care Savings:

Many homeowners build an accessory dwelling so they can comfortably downsize and age in place. The New Avenue study found that within just five years there is an estimated $234,000 in savings by going the New Avenue accessory dwelling route compared to nursing home costs.

Basic Assumptions:

•$250,000 Investment, financed with a 30-Year Fixed Mortgage at 4.25% interest rate

SeniorCare Data:

•Private Room in Nursing Home - $83,950.00(4% annual growth in costs from 2008)

•Assisted Living Facilities - $41,400(5% annual growth in costs from 2008)

•Hourly Home Care - $27,000(based on $13.50/hr rate for 40 hours a week)