Converting a garage to an apartment.

[Amie D.]

I am considering picking up a small 3 bedroom, 2 bath home and renting it. I could probably pick it up for $50K w/a down payment of around $15K and it would rent for about $700-$750 a month as it is now.

The house is located on a double lot with a large, 2 1/2 car barn-style detached garage that sits behind the 2nd lot. The garage is not quite two stories but almost. The garage is wood-framed on a concrete foundation, sided and roofed similarly to the house and already has electric running to it, but no plumbing. Has anyone ever converted a garage to an apartment or studio and if so, what was involved in doing so?

Without the garage, the house still has an off-street parking area behind it for 2 cars as well parking on-street in front of the house. The garage (possible apartment) would also have parking on the street in front of the empty portion of the double lot in front of it, as well as a space behind it. The garage is currently accessed from the alley (where the garage door sits) as well as a separate door from the yard.

It seems that in the future there could also be room to add a 2nd property on the double lot, but seeing that would involve a whole new structure + utilities, would not be as cost efficient, as this area isn't one I would expect a lot of appreciation in.

Thanks!

[Steve Babiak]

You'll need to get SEPARATE utilities to that unit unless the landlord plans on paying for the utility bills. Existing electric might just be tapped off of the existing house panel; you would want a separate service line and breaker panel for this garage unit. You could have electric heat, so no need to consider heating fuel unless you want to use some other fuel source. Not sure how water and sewer are handled there, but shared water and sewer usually falls on the landlord. Anything else like trash to consider too?

Here is a link where I posted about allocating utilities to tenants without separate meters (not advisable in my state of PA):

http://www.biggerpockets.com/forums/52/topics/72185-water-sewer-bill---what-to-do-with-it?page=1#p412876