I live in Colorado Springs and am planning to house hack either a multi family or large single family.
I'm still saving and analyzing at this point.
From what I've been learning, it's hard to cash flow in this market without getting creative (adding value). With that in mind, every time I analyze a property with garage space, my first thought is "turn that into a bedroom, cash flow an additional 1000 per month".
I understand that lots of people want garage space here due to hail, but I also know that many people, like myself, aren't so concerned with that and are more concerned with a nice room in a nice neighborhood.
Is this a good idea, or should i approach it differently? Should I avoid doing this?
And if i did, how much would that cost?
You need to check with the local authorities as to the legality and permits required. In many areas, garage conversions are not legal.
I would not attempt an illegal conversion. It is not worth the liability
Just like Jim said, you will have a lot of red tape to go through in order to make something like this legal. And when it comes to renting out anything being legal from the start, will always help you in the long run.
onto of this taking out the garage space here in Colorado will not help you when you go to sell the property down the road. adding value to a property is one thing but taking away an asset to create the value is another. overall when it comes to converting a garage space know and understand all the laws in your area before you even buy a place. Best of luck!
@Jeremy Babin I would double check to make sure your numbers are right as well, a 1000 a month is pretty steep but I dont know the area. Also when you are house hacking you should be able to make the numbers fairly easy. I think you would be better off finding an unfinished basement or something if you are trying to value add.
@Jeremy Babin also I know here in Lakewood co, they have rules on how many un-related people you can have in a house at a time. I have never heard of it being enforced and see people filling 6 or 7 bed room houses with people in the area. Just something else to keep in mind.
Garage conversions sound like a great idea to value-add! Matter of fact, I've heard there are some turn-key companies that do that in AZ quite a bit. Maybe put in a regular size door for separate entry and plumb in a private bath as well. Oh, wait... those pesky licensing, permits and zoning laws might get in the way.
Don't worry, it will all work out... until you have a problem with the tenant. When the Judge hears it is an illegal room/apartment, how do you think the case will end up?
Find another (legal and proper) way to accomplish the value add, find a better deal, or look in another area. Good luck!
thanks guys, just tossing the idea around in my head! i absolutely wouldn't attempt anything illegal but I would like to know what i can and can't do to add value.
thank you for your input!
An additional bedroom won't net $1000/month anywhere I am aware of in the Springs, and you will get less for a house without a garage.
What zip code is the house in, and how many bedrooms does it have?
We recently converted a 3-car detached garage to a cottage on an R2 lot. It was painful, and expensive (about 85K) but in the end worth it to us. We ended up with a completely detached 2/1 unit, not an additional bedroom, and the house is between OCC and Manitou.
@Gretchen P. i was thinking taking this 2 car detached garage and turning it into 2 single bedrooms (500 each), it's in 80909 if i remember correctly. Each unit of the duplex is 2b1b. The driveway leads directly to the garage building. Or perhaps it would be smarter to do what you did with your detached garage?
You would need proper zoning, lot size (regardless of how it is zoned) and set backs, to make an ADU, much less 2 ADUs. If it is zoned R2, they probably won't allow it. There is also a minimum distance between buildings. I am surprised the 2-car garage is over 1000', that is unusual, our 3 car was 760'. You will loose square footage because the walls will need to be 6", and you will need 6" insulated on the floor or perimeter insulation, which might necessitate raising the roof. Set up a planning meeting with Pikes Peak Building, they will let you know what is allowed. If this is your first project, I don't suggest doing this, and don't think I'd spend the money in 80909. You'll get about $950-$1000 for a 1/1 500' standalone cottage with private fenced yard in 80909. We have a house/cottage (cottage is a 560' 1/1) and triplex (one unit is a 350' 1/1 cottage) in 80909, so I am familiar with the area. What you are considering would be more like a 2nd duplex, so you'll get a little less per side.