This Costa Mesa Home in Mesa Verde Comes With a Permitted ADU That Rents for $1,900/Month
1697 Labrador Drive, Costa Mesa, CA 92626 | Listed at $1,999,999 | 3 bed / 3 bath | 1,996 sq ft | 9,828 sq ft corner lot
There are homes with ADUs, and then there are homes where the ADU actually changes the math.
1697 Labrador in Mesa Verde is the second kind.
The property is a beautifully upgraded 3-bedroom, 3-bathroom ranch home on a large corner lot in one of Costa Mesa's most desirable neighborhoods — the Island Streets of Mesa Verde. But what sets it apart from every other home in this price range is a permitted 420 sq ft studio ADU with its own separate entrance, full bathroom, kitchen, fireplace, and living space — built in and ready to rent for $1,900 per month.
That's $22,800 in gross annual rental income on a property that doubles as your primary residence.
What Does the Property Include?
Main Home: 3 bedrooms, 3 bathrooms, 1,996 sq ft of single-story living on a 9,828 sq ft corner lot. Luxury vinyl flooring, three fireplaces (dining room, bonus room, and more), strategically placed sun tunnels for natural light, and a remodeled kitchen with Corian counters, butler's pantry, and walk-in pantry. The guest bathroom alone is worth a walkthrough — spacious shower, soaking tub, stone counters. It's the kind of detail that signals the whole home was done right.
The ADU: A permitted 420 sq ft studio with a separate entrance, private bathroom, kitchen (range, refrigerator, sink), and its own fireplace. This isn't an afterthought — it's a well-designed unit that integrates with the main home while giving tenants the independence of a private space. Costa Mesa's ADU ordinance allows this exact type of addition on residential lots, and this one is fully permitted.
The Lot: 9,828 sq ft corner lot — nearly a quarter acre in the heart of Mesa Verde. Two-car attached garage, solar, no HOA, and all utilities connected.
Schools: Newport Mesa Unified — California Elementary, Tewinkle Middle, Estancia High School.
Why the ADU Changes the Buying Equation
A permitted, rentable ADU on a primary residence isn't just bonus income. It changes what you can qualify for and what the home is actually worth.
On the mortgage: Under Fannie Mae's current guidelines for ADU rental income, a lender can count a portion of documented rental income from an existing, permitted ADU toward your mortgage qualification. At $1,900/month, that income offsets a meaningful portion of your PITIA — which affects how much house you can comfortably qualify for. If you want the full breakdown of exactly how lenders count this, here's how ADU rental income works at underwriting.
On valuation: A permitted ADU with rental income history is appraised differently than a home without one. It broadens the comparable set an appraiser can use and introduces income-based valuation alongside the traditional sales comp approach. How ADU properties are valued when you sell in Orange County explains what that looks like in practice — and why permitted units command a premium over unpermitted ones.
On your carry cost: $1,900/month coming in against a $1,999,999 purchase price meaningfully reduces your effective monthly carrying cost. At current interest rates, that's the difference between a stretch buy and a property that funds a significant portion of itself.
Is the ADU Legal? What to Check Before You Write an Offer
This ADU is a permitted addition — confirmed in the private remarks and MLS documentation. That matters more than buyers sometimes realize. Under California's state ADU law, a permitted unit can be rented to a non-family member, counted toward mortgage income qualification, and factored into appraisal. An unpermitted unit can't reliably do any of those things.
Before you close on any property with a rental unit, here's what I check on every ADU purchase in OC and LA — permit history, utility setup, access type, and how the income gets treated at underwriting. On this property, the fundamentals are clean: permitted, separate entrance, existing kitchen and bath, and priced into the ADU income from day one.
Note: Costa Mesa prohibits short-term rentals (Airbnb-style), so this unit is a long-term rental play. At $1,900/month for a permitted 420 sq ft studio with its own entrance in Mesa Verde, that's a legitimate income stream with strong demand from the local professional renter pool.
Who This Property Is Right For
The owner-occupant who wants income. You live in the main house. A tenant covers $1,900 of your monthly costs. You own in Mesa Verde — one of Costa Mesa's most sought-after neighborhoods — at a price point that includes built-in income.
The multigenerational household. The ADU's separate entrance and private layout make it a genuinely independent space for extended family, an adult child, or a live-in caretaker — without sacrificing privacy on either side.
The buyer who wants a primary residence that also makes financial sense.Costa Mesa is one of the strongest ADU markets in Orange County — demand from nearby South Coast Plaza employment, the John Wayne Airport corridor, and proximity to Newport Beach keeps rental vacancy structurally low. A 420 sq ft permitted studio in this neighborhood doesn't sit empty.
The Neighborhood
Mesa Verde's Island Streets is a specific pocket of Costa Mesa that buyers seek out — not just Costa Mesa generally. It's a walkable, well-maintained grid of streets named after Pacific islands, with ranch homes on generous lots, mature landscaping, and a quiet, established feel that newer communities can't replicate. This is a corner lot at Samoa and Labrador: space, natural light, and the kind of neighborhood where properties are held for decades and rarely come up.
No HOA. No Mello-Roos. Newport Mesa Unified schools. Solar installed.
Property Details at a Glance
Address: 1697 Labrador Drive, Costa Mesa, CA 92626
List Price: $1,999,999
Bedrooms / Bathrooms: 3 bed / 3 bath (main home)
Square Footage: 1,996 sq ft (main home)
Lot Size: 9,828 sq ft — corner lot
ADU: 420 sq ft | 1 bathroom | Permitted | Separate entrance | Fireplace, kitchen, full bath
ADU Rental Potential: $1,900/month | $22,800/year
Garage: 2-car attached
Solar: Yes
HOA: None
Year Built: 1958
Style: Ranch
Schools: Newport Mesa Unified (California Elementary, Tewinkle Middle, Estancia High)
Status: Coming Soon — Showings begin July 24, 2026
How to See It
To schedule a private showing or get questions answered before the open house, contact Dylan Serna directly:
📞 Call or text: (714) 860-2868
Dylan Serna | ADU Specialist | DRE #02217359 | adurealtor.net
If you're actively looking for a Costa Mesa home with an ADU or want to understand how ADU income affects your buying power before you start making offers, here's what I look at on every investment property in OC and LA — from permit verification to income underwriting. Text or call and we'll run through it.
Dylan Serna | ADU Specialist Agent | DRE #02217359 📞 (714) 860-2868 | adurealtor.net
