Converted garage, thoughts?

Question

I have a great opportunity to pick up a nice single family home 3/2/2; the numbers are great but the only thing i am unsure about is that they have converted the garage into an additional living room. The remodel looks to have been well done but I have never dealt with this and would like to know:

How will this affect the appraisal, market desirability, and would it be worth it to convert it back? I plan on rehabbing and leasing the property.

How will this affect the appraisal, market desirability, and would it be worth it to convert it back?  I plan on rehabbing and leasing the property.

Kiera Underwood · Answer

In OKC it's not required to have it permitted so contractors/owners often don't permit it. It generally brings higher rent and overall has been a good thing in my experience!

Ivan Vera · Answer

@Paul

@Paul Zofsak Check the recent rented/sold comparables in the area and see if the area supports a conversion or a 2 car garage.

Will Pritchett · Answer

@Paul Zofsak I agree with @Ryan Dossey on this.  Where I am, if you add a closet and a window that is a bedroom.  Bedroom count matters here.  I have a few converted garages and they rent well.  In San Antonio a lot of people don't actually park in their garages so it's mainly just giving up storage space.  We've never ever had an issue renting one with the converted garage.  Ours happen to have central air ducted to the extra room but it could also be supplemented with a window unit or mini-split unit if needed for climate control.

Best of luck.

Clayton Collins · Answer

Don’t forget to think about if you’ll have two meters for water, electric, gas, and two addresses.   You’ll probably have to call it guest quarters or a bath house.  Zoning and permitting are a bid deal.  I’m about to do this myself.  I’m buying the house on a regular loan and doing cash for the apartment part.

Yenlan Patton · Answer

I have converted garage of one our rental home, this was 2 car garage. Thinking to make an additional bedroom, but not sure will be how much. I might renting for another 1 or 2 and sale the house. Too much headache.

Paul Zofsak · Answer

i think converting it back would be much more costly than what it would be worth.  However, the extra space may add perceived value to a potential tenant in this area.  I have seen several converted garages in this neighborhood, so the the type of tenant looking to move into this area may see this as a plus.

Ryan Dossey · Answer

If you don't need two living rooms and are looking at this as a rental I would consider turning it into an additional bedroom.

Chris Mason · Answer

I have no idea what is "common and normal, [if] done in a workmanlike manner" in your market. In my area, an appraiser would likely say the aforementioned bit in quotes and it wouldn't be an issue.

There's no snow in Texas, so I don't think it would harm the value. At least that's the logic applied out here in CA where "garage" is synonymous with "storage space." Arguably (YMMV), converting storage space to a finished living room or kids play area (with carpets etc) could improve value.

But then again, it gets HOT in Texas. So you tell me: do people put their cars in garages to shield them from heat so the seat isn't sticky (etc) when they go to get in their cars? If so, it might slightly diminish value, depending on how much work it would be to tear the carpets (etc) out and make it a functional garage again. "Over improvement" is often the term used in cases like that, where an improvement either adds no value or it dings value.

If there's a bed in there and it looks like someone's living in there, there will be an appraisal issue.

Brit Foshee · Answer

@Paul Zofsak

The main thing is to make sure the conversion was permitted. If it wasn't, it will be a nightmare for lending and resale purposes.

If it was permitted, I would leave it as is if you are turning it into a rental.

It's hard to be definitive without all the details, but probably not worth spending the money to converting it back.