What to do with converted garage done without permit

Question

I am about to start renovation on a property in Houston.  It has a converted garage which was done without a permit and looks to be not up to code.  My plan was to demo and convert it back to a garage.   Getting it up to code would put me over budget.

The property was appraised as a 2 bedroom not a three (appraiser went with public record and did not count the addition).  It appraised a little over what I had hoped for.

Question to the forum:

Should I even bother converting the addition back to a garage?  Since the appraiser did not include it in the appraisal anyway.  Will not converting it back  hurt my final appraisal?

thank you!

Cassi Justiz · Answer

If they didn't count the addition as living area, then adding a garage should bring you value. However, if it was counted as a living area (even without it being considered a bedroom) then changing it back into a garage will probably bring down your appraisal value. Garages do bring value, but in most areas it won't bring as much value as additional sq footage. It's very neighborhood specific though, so I would double check with someone that is really familiar with your area.

If it's a flip house or something of that nature where you are going to be selling it, there is a high probability that the code issue will come up at some point. So you may want to go ahead and get it permitted and keep it as a conversion (if it fits into the neighborhood standards).

If you are keeping it to BRRRR or something like that then I wouldn't spend the money to convert it back and get it permitted now.

Mark Derecho · Answer

Thanks @Cassi Justiz