Do Garage Conversions Make Financial Sense?
September 2, 2021 Mark MacFarlane

Do Garage Conversions Make Financial Sense?

Posted in Home Buying, Home Selling

Do Garage Conversions Make Financial Sense?

What is the most neglected area of your house?

The answer for most people is the garage. Could your underutilized garage serve better purposes than keeping clutter or junk? Or, perhaps you need an additional room in your house for reasons such as creating a home office, recreation room, guest room, or kids’ room.

Attic and basement conversions are top renovation projects in American homes, as are garage conversions. However, does it make financial sense to do a garage conversion?

Garage conversion: is it worth it?

Do all home renovations pay off? While some home improvement projects can be a blessing at the time, they can become a curse in the long run when you decide to sell your property. A home renovation, if not thought out and executed well, can decrease your property’s value.

When purchasing a home, most buyers factor in the availability of a garage when making their decision. In fact, according to a recent survey by the National Association of Home Builders, a garage appears in the most wanted list of American home buyers’ features.

Since most people put a premium on a garage, converting yours into something else may not be the best idea under certain circumstances. Perhaps you need to explore other options, for example, “sell house as-is” and find another home that fits your current needs.

Why a garage conversion?

The US is facing a record housing shortage, with fewer units on the market for sale today than decades ago. Thus, for some people looking for additional space, purchasing a larger home may not be an available option. Here are good reasons why you might consider garage conversion:

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Add value to the house

If you plan well and execute a quality garage conversion, you can increase the value of your property by up to 10% and accumulate up to 80% return on investment. It can thus be better than a “sell home as-is” transaction, sometimes. This option can be a goldmine, especially if your property is in warmer regions of the country. Buyers in these regions find a garage conversion appealing as they are likely to need extra living space. Due to the excellent weather, they are willing to park their vehicles outside.

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It’s customizable

You can customize your garage space to anything you want. You can easily find a professional to help you design the space to suit your needs.

You now know why converting your garage can be a wise move. However, as you look for more answers to the question “does it make financial sense to build a garage conversion?” you also need to consider the other side of the coin before making the final decision.

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It doesn’t interfere with natural light

Other options for creating extra space like single or two-story extensions may minimize light into other rooms in the house. However, since your garage already exists, its conversion won’t block sunlight to other parts of your home.

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The budget for a garage conversion is likely to be lower than other options such as loft conversions, single-story or double-story extensions.

Drawbacks of garage conversions

The obvious downside is that the garage conversions will make you lose the opportunity to use the space to keep your car. Moreover, all the stuff you would otherwise keep in the garage will now be your new headache. If your house lacks a storage shed, a basement, or extra closet space, a garage conversion might be impractical.

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A bump in value is not a guarantee

If you live in an area where parking is at a premium, you will significantly lower your property’s value if you swap out the garage.

In some urban areas, the square footage of living spaces worth less money than parking spaces. For example, in some areas of Boston, you can sell your single car garage for between $300000-$400000. Thus, you can bring in more money if you undertake a “sell house as-is” instead of a garage conversion.

People living on busy streets that lack dedicated driveways may find it hard to access public parking lots. If you live in such places converting your garage could negatively impact the value of your property significantly. Besides, the extra living spaces made may count as additional rooms, affecting your property taxes.

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Air conditioning and heating budgets

A professional garage conversion will have appropriate insulation as well as adequate heating and cooling systems to serve the newly created living space, which may be expensive.

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Permits and laws

Get in touch with the relevant local offices to learn about regulations and necessary permits before converting your garage into a living space. You might need several permits, licenses, or a garage conversion might be prohibited.  The permitting can be expensive and difficult to obtain, and municipalities are notorious for their bureaucratic hurdles and dragging out the permit approval process.

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Buy cheap buy twice

In your attempts to minimize the costs, you might end up with a final product that detracts from the value and appeal of the rest of the home. If you have to convert your garage into a living space, be ready to pay for quality construction material and workmanship. The insulation is especially important, if the newly created living space is not adequately weatherized and the air is not well-conditioned (heat and cool), it may make the area unlivable and lead to mold development. This could be very expensive in the long run.

What are the costs?

Construction experts agree that the budget for a professional garage conversion can range between $10,000-$25000, or even more. The three main variables are electrical work, plumbing, and HVAC systems.

Depending on how you design your living space, plumbing budgets can quickly become huge. If you’re converting your garage into an area where you can cook or have a bathroom, be ready to spend $2,500 or more on the plumbing installation.

While your garage will have basic electrical wiring, you’ll likely need an upgrade. Most garages have a single light and electrical receptacle. You will probably have to add at least one more 20 amp electrical circuit, including receptacles and additional lighting. Hiring an electrician to add proper electrical receptacles and lighting can be expensive.

To make the space liveable, you will need ventilation, cooling, and heating systems. The cost will vary greatly depending on the ability to extend your home’s existing systems to the garage.  If extending the system is not possible or practical, a new system to just service the garage will be expensive. You will also have the additional cost for the electrician to bring power to the new equipment.

Moreover, the garage door is poor at keeping heat out during the summer and keeping the heat in during the winter. You will need to build a solid wall with an appropriate exterior finish to match the existing house.

 The bottom line

Whether converting a garage makes financial sense will depend on whether you plan to stay in the home long-term or sell soon. If you plan to remain living in the house for many years, converting the garage into a living space will add a great deal of enjoyment to your home.

However, if you plan to put your house up for sale and move out in the next few years, it probably won’t make financial sense to do a garage conversion.

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Do Garage Conversions Make Financial Sense | OutFactors – Dallas Fort Worth, Texas