Refinish garage to add space?

Question

A house I'm looking at flipping  that is 1350 square feet  but the garage would make a great add-on for 625 square feet extra .  I think to refinish the garage would cost  about 15K .  It would bring down the cost per square foot dramatically  so I think I could add about 30k  to the sale price  easily .  Only problem is now there'd be no garage,   so I was thinking about a carport,  but to me a carport sounds really cheesy  if  the house is new and rehabbed .  Also a contractor said the HVAC unit  is not enough to  provide for that extra area  so I'd have to get a wall mount indoor unit  but that sounds really  tacky to me.  What do you guys think? How do I decide?

Jared Garfield · Answer

Leland,

Our team has done 3,800 properties over the last 15 years, and this is a great question.  It really depends a great deal upon what's standard for the area.  In some areas garage conversions are really popular, and the appraiser will give you quite a bump in the value if the space is finished to the same standards of the rest of the home.

• This means that the house must not look like a conversion, make it look like it was part of the original construction.  Hint:  You don't want to use vinyl siding or hardiboard to enclose a framed over space where the door used to be.  Putting a door right in the middle will really add to tackiness!  Putting a window in tastefully, and doing hard coat stucco that ties into the rest of the house could really make it a winner, and if the home is brick, stucco could work great if you paint the brick the same color with masonry paint. 
• There are heating and cooling units similar to what you see in a hotel that can be low profile from the exterior.  Try to put it on the side of the house where it will be less noticeable.  Depending upon the roof truss's sometimes it's not real expensive to run duct work into the garage (but in this case it sounds like the existing hvac won't make that work). 
• Look at the comps and see how well homes with converted garages sell, how do the days on market compare to smaller homes that have the garage.  Most likely in an expensive area like California your cost per square foot will really make this conversion worthwhile.
• Lastly, if you are going to take the gamble, make sure that in worst case scenario that you will at least recoup at least the same amount of money you put in, and that the house will sell faster.  If you don't get additional profit, but at least net the same, but sell quicker,  you've added to your experience and haven't lost anything!

Best of Luck, and I hope this deal makes your pockets bigger!

Leland S. · Answer

@Gina Ruff Thanks Gina! I agree!

Gina Ruff · Answer

We just bought a house 1300 square feet, the selling point was the garage, two car and washer and dryer were located there. Coming from a basement laundry that was huge for me.    I would make the 1300 square feet nice as pie and leave the garage.  You will find a seller for it.  Garage conversions no mater how nice, are a turn off for me, you don't know if the homeowner did it and what bad construction may be lurking behind it. If your market is 40-50 year olds with no kids..that is my opinion.

Leland S. · Answer

@Jared Garfield Thanks for the detailed response!

First, I'm actually buying in Tennessee, but the extra square feet definitely does help based on other units that sold. I'll try to look at units without garages and converted, I'm not sure how to find that kind of data. I really like the idea of the masonry paint to cover because there is brick, so I could just cover that whole side with it. In fact, I might want to cover more brick since it looks pretty dated looking.

The main reason I think it will easily cover the cost is because the square footage goes way up and it's a 3 bed 2 bath, so people will immediately see relatively a larger house for the cost. On the flip side, people might get turned off by a car port even if the house is nice. I feel like it's a big minus. So I think it will cover the cost, but maybe not add much to the profit without a real garage. Redoing the garage might make me have to add a real garage, which would probably make the whole project not worth it.