Tear down garage to turn duplex into triplex?
As the title says, I have mixed feelings about this project. I have a duplex in a premium location. One block from the beach in Ocean Beach, San Diego. There is a detached two-car garage that the 2 units split. I can convert the garage into a one or two-story extra unit on the property. I am worried for two reasons: removing the garage will reduce the value of the homes more than the extra unit will add, and the property value will not increase that much with the extra unit(s). The area does not have many units with parking spaces or garages, so, I am not overly worried about this (will probably reduce rents by $100-200). The two existing units can rent for about $2,500 each, and a garage conversion single unit will rent for about $2,800. Construction will cost about $120,000 for a garage conversion and $250,000 for a two-story, 2-bedroom. (2 bedroom will rent for $4000-$4500).
My initial reaction is that it costs $150,000 to add an extra door in a premium location, but I am interested to hear thoughts.