500 sq.ft garage conversion to living unit

[Jimmy Hendrix]

Can a 500 sq.ft garage be converted to a living unit(bath shower + small kitchen)? Are permits given? How much would be construction + permit cost together? Any good contractor referrals who can get it done for a best possible price?Will property taxes go up and how can we calculate by how much will they go up? I read some posts that it is based on construction costs for making the changes? Will it increase or decrease property value in west San Jose/west valley area?

[Brian Larson]

@Jimmy Hendrix - San Jose is very pro-ADU (accessory dwelling unit). As of today, they are waiving many of the fees to build them. It is very possible to do a garage conversion. The cost are quite relative. You should speak to a GC for a better idea on that. As far as taxes go, you would be re-assessed for the new structure which means that the property taxes would increase (keep in mind most of the home value is the land in the Bay Area). Lastly, the increase in property value at this time is very subjective. The reality is that there are not enough comps for most appraisers still and they will most likely need those because they will treat the property as a SFH and not a duplex when they give an evaluation.

My advice is to build only if you think you will hold the property for a very long period because the income from the rental will more than make-up for the build cost and the taxes. Then, when the property appreciates and the appraisal process catches up to these changes, you will be in a very positive real estate position.