I'm looking to build a garage apartment. Currently I have a 24x24 2 car garage and i'd like to invest some savings into converting it into a single family dwelling. My town hall approved of this and i'm curious if anyones here had an existing garage and added a second floor? I would be removing the roof to add a complete second floor. The garage is currently on its own deed, electrical and taxes from my rental across the street. I have a budget of $60,000 to complete this. I've seen some model plans online and would like to know if anyones who's done it can offer advise. From an investor perspective, a 1 bedroom apartment with garage in my area can rent out for $1000 easily. I'm unsure if I should consider a 2 bedroom and charge $1300 or if it'll too small to consider for 2 bedrooms. Any advise would be much appreciated!
@Jon Arteaga - Sounds like a cool plan. You also have the hardest part done, getting the city to sign off.
The oversimplified math is you can generate $1,000 in gross per month from a $60k investment, that is great.
Since it is deeded separately, have you looked at having it set on its own utilities? Otherwise you have to always make sure utilities are on at the rental across the street.
One other note, are you in a tourist area? Or have you considered setting it up as a short term rental and listing on Airbnb? If you have enough folks coming through, it could generate more cash flow as a short term unit than a long term unit.
We just added a guest house/efficiency style two story apartment in the garage building we have. We ended up around 505 sq ft. 3/4 bath and kitchenette downstairs, living/sleeping upstairs. We laid it out as a quasi studio on the second level. I would say if your space is at 24x24 it is really too small for a two bedroom.
Have you looked at investing the 60K into another property? I would at least do a little research into a multifamily and/or other RE investments in the area to help gauge your plan.
@Andrew Kerr thanks for the reply. Its currently on its own separate deed with separate taxes & separate utilities. My area is nice & close to a large park but i wouldn't say its in a tourest location.
@John Miranda thanks for reply, i'd prefer another rental. My first one is in a good location & is in great shape. Most of the rentals in my town or surrounding town are somewhat overvalued or are in need of remodelling. They also don't appear too often (took me 2 years to find one). I was curious what the experts thought about maybe purchasing another home with a 30k down payment instead of going this route or putting this off until its ideal to. I like having cash incase the right rental appears. It is a large amount of cash to invest.
@Tyler Work Hi Tyler, thanks for the reply. The garage is across the street from my rental & could hypothetically be sold off on its own if need be. I think It could easily sell for $130,000
@Jon Arteaga sounds like a no-brainer to me. I'll take the $70k instant equity plus cash flow to pay it off.
If it is a separate property like you describe, sounds like it would be fairly easy to pull that $60,000 out when you are done and use that to purchase the next multi-family deal you come across. Best of both worlds.