HeartLink Homes | Keller Williams Puyallup HeartLink Homes
Category One

What HB 1337 does and doesn't allow, what cities can still require, and how HOAs and short-term rental rules fit in.

HB 1337 was enacted into law on July 23, 2023, and is permanent state legislation. While any law can theoretically be amended, the momentum toward increasing housing options makes significant rollbacks unlikely. HeartLink Homes stays current on all regulations and ensures you understand how they affect your property.
If you condominiumize your DADUs (to sell or separately finance them), yes — HOA formation is legally required for any common property in Washington. Strategic partners handle all HOA setup, documentation, and legal requirements. If you are only renting to family members and never selling, an HOA may not be required. HeartLink Homes can clarify what is needed for your specific goals.
Cities must allow DADUs under HB 1337 if you are within an Urban Growth Area and meet basic requirements. However, they can still enforce reasonable regulations like building codes, setbacks (within HB 1337 limits), and environmental protections. Our strategic partners have extensive experience navigating local permitting processes.
DADU stands for "Detached Accessory Dwelling Unit" — a separate structure from your main house. ADU (Accessory Dwelling Unit) is the broader term that includes both DADUs and attached ADUs (like basement apartments). HB 1337 specifically addresses DADUs, which is what HeartLink Homes focuses on.
This depends on your local jurisdiction. HB 1337 allows cities to restrict short-term rentals in DADUs, and many do. Most areas require 30+ day minimum leases. HeartLink Homes will clarify your local regulations during consultation. Most clients focus on long-term rentals anyway — more stable income, less management hassle.
Under HB 1337, HOA declarations created after the law's enactment (2023) cannot prohibit DADUs. However, older HOAs may have restrictions. HeartLink Homes will help you understand your CC&Rs during the consultation. In some cases, HOA rule changes or variance requests are possible.
No. HB 1337 eliminated the owner-occupancy requirement. You do not have to live in the main house or the DADU. You can rent both units, live in one and rent the other, or any combination. This flexibility is one of the law's biggest advantages. HeartLink Homes can discuss various strategies during your consultation.
Category Two

Financial questions

What a DADU costs, what it returns, what it does to your tax bill, and how flexible financing programs are structured.

$250k–$450k Typical build cost for a quality DADU
10%+ Common cash-on-cash return on rentals
180% Total ROI can exceed this in strong markets over 5–10 years
$0 Cost of the initial HeartLink consultation

The build cost, cash-on-cash return, and ROI figures above are reported by our building partner from their completed DADU projects. HeartLink Homes is a real estate brokerage, not a builder or a lender, and does not verify or guarantee them. Individual results vary by property, market, and timing.

Costs vary based on size, finishes, site conditions, and location. Our building partner reports a typical range of $250,000-$450,000 for a quality DADU, based on their own completed projects. Factors include square footage, bedrooms/bathrooms, foundation requirements, utility connections, permits, and finishes. HeartLink Homes is a real estate brokerage and does not build or price DADUs — during your free consultation we can share the ranges the builder reports and connect you with the strategic partners who prepare detailed project budgets.
Returns vary by location and strategy. Our building partner reports cash-on-cash returns of 10%+ on rentals, and total ROI (including appreciation) exceeding 180% in strong markets over 5-10 years, from their own completed projects. For condo sales, profit depends on construction costs vs. sale price, but many homeowners see significant returns. Those are the builder's figures — they are not verified or guaranteed by HeartLink Homes and are not a projection for your property. What we provide is real estate market analysis during consultation.
Yes, adding square footage and value to your property will increase your assessed value and property taxes. However, the rental income or sale profit typically far exceeds the tax increase. Plus, you may qualify for tax deductions on expenses related to rental property. HeartLink Homes can discuss the financial implications, and you should consult your tax advisor for specific guidance.
If you rent your DADU, you can typically deduct expenses like mortgage interest (if applicable), property taxes, insurance, maintenance, depreciation, and more. Tax laws are complex and change, so consult a qualified tax professional. Strategic partners provide documentation to help with your tax preparation.
Various financing approaches are available through our strategic partners, designed specifically for DADU projects. These do not require refinancing your primary mortgage. Options range from zero-down programs (for qualifying properties) to partial financing partnerships to full self-financing. HeartLink Homes can explain how each approach works and help you determine which might fit your situation, then connect you with the right resources.
Yes, most financing partnerships include equity buyback options. After a period of rental performance, many homeowners can obtain conventional financing to buy back partner equity and achieve full ownership. Specific terms depend on which program you use. HeartLink Homes' strategic partners explain all details during their consultation with you.
Flexible financing programs available through our strategic partners generally work differently than traditional loans. However, if you later obtain conventional financing to buy back equity, that is a standard loan that will appear on your credit. HeartLink Homes and our strategic partners will explain all credit implications during consultations.
Not Tax Advice

Tax treatment of rental property, depreciation, and deductions depends on your individual circumstances and on tax law that changes over time. Consult a qualified tax professional before relying on any of the above.

Category Three

Construction & design questions

Timelines, design control, who does the building, and what happens when the site throws a surprise.

Our building partner reports 12-18 months from initial consultation to move-in on their completed projects, though timelines vary by jurisdiction and complexity. Their rough breakdown: Planning (1-2 months), Design (2-3 months), Permitting (2-4 months, varies greatly by city), Construction (6-9 months). Some cities are faster, others slower. HeartLink Homes does not build or schedule the work; our building partner provides realistic timelines for your project during consultations.
Yes. Strategic partners typically offer three approaches: (1) Select from pre-designed packages, (2) Modify an existing package, or (3) Work with architects to create fully custom designs. For finishes, you can choose from standard selections or upgrade as desired. The design process balances your vision with practical construction realities and budget.
Yes, DADUs are designed to harmonize with your main house and neighborhood character — that is one of the key advantages over multiplexes. Architects consider your main house style, materials, and colors to create complementary designs. The goal is to enhance your property's overall aesthetic and value.
HeartLink Homes partners with an award-winning design-build firm with a 15-year record of state and national remodeling awards. That partnership gives you construction quality, expertise with DADU-specific challenges, and comprehensive project management. Our building partner has extensive experience with utilities, setbacks, permitting, and the complexities of DADU construction.
Surprises happen, especially with site conditions (soil, drainage, utilities). Experienced builders address issues promptly and keep you informed of any changes. Budgets typically include contingency allowances. The goal is solving problems quickly so your project stays on track.
Award-winning builders provide standard new construction warranties covering workmanship and materials. Specific warranty terms are detailed in construction contracts. Additionally, ongoing maintenance support is typically available after construction is complete. Quality builders stand behind their work.
Category Four

Rental & management questions

Finding tenants, setting rent, handling problems, renting to family, and insuring a rental structure.

Yes, property management services are available through strategic partners if desired. This includes marketing, tenant screening, lease preparation, and ongoing management. Or you can self-manage using your own methods. Many homeowners prefer professional management initially until they are comfortable managing independently. HeartLink Homes can connect you with property management resources.
If using professional property management services, they handle tenant issues according to Washington landlord-tenant law. If self-managing, you are responsible for tenant relations and problem resolution. Proper tenant screening minimizes problem tenant risk. Resources and guidance are available regardless of management approach.
HeartLink Homes provides market analysis during consultation showing comparable rental rates in your area. Rates depend on location, size, finishes, and local market conditions. Most 2-3 bedroom DADUs rent for $3,500-$5,000/month in our service areas. We help you understand pricing strategy while maximizing your income.
Yes. HB 1337 does not regulate who you rent to or what you charge. You can rent to family members for any amount you agree upon — even $0 if you choose. This flexibility makes DADUs well suited to multigenerational housing. HeartLink Homes can discuss how different scenarios affect your overall strategy.
You will need landlord insurance (rental property insurance) covering the DADU, liability, and loss of rental income. This is different from regular homeowners insurance. HeartLink Homes can recommend insurance providers familiar with DADU properties. If condominiumized, the HOA master policy covers structure, and unit owners carry HO-6 insurance.
Fair Housing Reminder

All tenant screening and rental decisions must comply with federal, Washington State, and local fair housing law. Screening criteria should be applied consistently to every applicant.

Category Five

Property & real estate questions

Selling later, phasing your build, condominiumizing a DADU, parking limits, and living through construction.

There are several scenarios:
  • If DADUs are condominiumized: sell all together, or sell the main house and DADUs separately.
  • If DADUs are not condominiumized: sell as a package deal — main house + 2 rental units (often very attractive to investors).
  • Having income-generating DADUs often significantly increases your main house value.
HeartLink Homes can discuss strategies and, when you are ready to sell, we handle the entire real estate transaction.
Yes. Many homeowners phase their development. Build one DADU, see how it performs, then add a second later. Phasing can spread costs over time and reduce financial pressure. However, doing both at once can sometimes be more cost-effective (shared permitting, mobilization, etc.). HeartLink Homes can help you evaluate the trade-offs and long-term real estate strategy.
This is exactly where HeartLink Homes excels. Once your DADU is built and condominiumized (legal structure handled by strategic partners), HeartLink Homes takes over:
  • Market analysis and pricing strategy
  • Professional photography and marketing materials
  • MLS listing and exposure
  • Buyer showings and qualification
  • Offer negotiation
  • Transaction management through closing
We position your DADU to maximize value and attract the right buyers. Our real estate expertise ensures you get the best possible return.
HB 1337 limits parking requirements: maximum 1 space per unit on lots under 6,000 sq ft, and maximum 2 spaces per unit on larger lots. Within 1/2 mile of major transit, no parking can be required. Many jurisdictions require less than the maximums. Parking needs depend on your location and the market you are building for.
There will be some disruption — construction noise, contractor vehicles, and the like. However, because DADUs are typically in backyards or alley-accessed, disruption is usually manageable. Construction happens during normal business hours. Most homeowners stay in their main house throughout the process. Communication helps address concerns promptly.
Category Six

What we actually do, why we sit between you and the builder, where we serve, and how to start.

HeartLink Homes is your trusted real estate advisor specializing in DADU education and transactions. We:
  • Educate you about DADU possibilities, HB 1337 benefits, and strategies
  • Provide real estate market analysis, and walk you through the return figures our building partner reports from their completed projects
  • Connect you with our award-winning building partner and other strategic partners
  • Handle real estate transactions when you sell DADUs as condos or sell your main house
We are real estate professionals — not builders, contractors, or lenders — who guide you through the DADU journey, from education through final sale.
HeartLink Homes provides comprehensive guidance that goes beyond construction:
  • DADU education specific to your property and goals
  • Real estate market analysis and investment strategy
  • Connection to established building resources we have vetted
  • Professional real estate representation when it is time to sell
Most importantly, we are on your side from the beginning. We help you understand whether a DADU makes sense, explore your options with no pressure, and then connect you with the right resources. When it comes to selling DADUs or your main house, our real estate expertise maximizes your return.
HeartLink Homes serves Pierce County & South King County including Puyallup, Sumner, Lake Tapps, Bonney Lake, Federal Way, Maple Valley, Olympia and surrounding communities.
Yes. Most clients are building their first DADU. That is exactly why our educational approach matters. We help you understand the process, possibilities, and potential before you commit to anything. There is no expectation that you already know about DADUs — that is what we are here for.
Yes. The consultation with HeartLink Homes is completely free with no obligation. We want you to have all the information needed to make an informed decision. If we determine a DADU does not make sense for your situation, we will tell you honestly. If it does make sense, you will know exactly what is possible and what the next steps would be. No pressure, just education and guidance.
Contact HeartLink Homes to schedule your free consultation: We will discuss your property, goals, and questions. You will leave with clarity about what is possible and whether a DADU makes sense for you. If you decide to move forward, we will connect you with our strategic partners and guide you through the entire process — including handling real estate transactions when you are ready to sell.
Continue the Series

Where to go next

Part 8 · Previous Is Your Property Suitable? Part 0 · Start the Series Again Washington's Housing Challenge
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About This Guide & Sources

Our role: HeartLink Homes is a licensed real estate brokerage. We are not a builder, a contractor, or a lender. Design, construction, and financing are handled by our building partner. Any construction cost, timeline, financing, or return figure on this page is reported by that partner from their own projects — it is not verified, offered, or guaranteed by HeartLink Homes, and it is not a projection of what your property will do. Our role is education, referral, and real estate representation if you later sell a DADU or your main house.

This FAQ was compiled by HeartLink Homes at Keller Williams Realty Puyallup from the questions homeowners ask most often. Information has been drawn from:

Important: This page is general education, not legal, tax, or financial advice. Cost, rent, and return figures are illustrative ranges that vary by property, market, and time. DADU rules are implemented locally, and requirements for lot size, height, setbacks, parking, and permitting vary by jurisdiction and change over time. Verify current requirements with your city or county planning department, and consult a qualified tax professional and attorney before making decisions. Contact HeartLink Homes to discuss your specific property.