Garage conversions are a hot topic as some homeowners prefer the added living area to parking space or storage. Benefits are the easily added space at a low cost. Just run an air conditioner duct into the garage (don’t forget the return duct), put down some flooring, install drywall and you are set, right?
Not so quick! The downside is no covered parking, and the converted space may be illegal. Building codes (if any) should be met for safety and resale value. Is that air conditioner duct work sized correctly? Is the air conditioner capable of cooling the additional space? Was insulation added to the attic and walls? Are the electrical outlets spaced correctly and grounded? Does the larger living area meet current zoning requirements? You get the idea.
One of the biggest setbacks with homeowner converted garages is the ability to sell the property. Many cities do not allow garages to be converted. I have seen multiple instances where a converted garage had to be restored to a working garage. I know of one instance where a house with a garage converted to living area was sold to a buyer looking for the additional living space. The city discovered the conversion and made the new owner restore the area to a working garage.
The next question is financial feasibility. Suppose a survey of houses in a community resulted in a median one car garage value of $4,500. Remember, this is a depreciated value based on sales, not cost. With a median one car garage size of 225 sf a value of $20 per sf is calculated. Suppose these houses are selling for a total of $60 per sf (median). If we remove the value of the land, site improvements, garage, porch etc the sale price is closer to $50 per sf. So you stand to gain $6,750 in value, right [ (225 sf X $50/sf) - $4,500 ] = $6,750? Well maybe.
The next issue is conformity and buyer acceptance. What are the other neighborhood houses like? Does the garage conversion make your house the largest in the neighborhood? Do other neighborhood houses have garage conversions? Do buyers in the neighborhood prefer a garage over the extended living area? There is no guarantee that buyers will pay the full $50 per sf for a garage conversion. In fact, if the buyers are concerned about code violations they may well pay less than the $50 per sf they pay for other living area. Who wants to deal with code violations as soon as you move in? If the conversion is not professionally finished it will show, and buyers many not be interested in paying full price for poor workmanship and potential problems.
Opinions on this issue vary around the country, and depend to a large degree on the legal aspects of the conversion. If it is illegal, you could be in for an expensive battle to keep the conversion. You could also have trouble selling the property. In areas of the country with loose or non existent building codes this is not an issue, and it comes down to financial feasibility and buyer acceptance, making the decision to convert much simpler.
For anyone considering any additions or conversions I would recommend researching the legal aspects before beginning any work. Ask your neighbors or local realtors if they know of any houses with converted garages that sold recently. Look at other houses in the neighborhood. Will adding living area to your house by way of a garage conversion bring it in line with other houses, or will you have far more living area than the typical house?
There is no one answer to the question of garage conversions. Legal requirements and buyer preferences vary across the country. Financial restrictions are unique to the property in question and the homeowner’s expectations. But consider all aspects of the project before beginning work.
