Will Garage Renovations Increase Entire Property Value?!? ROI

Question

I own a 2 Family home that has a 3 car (detached) garage.  The garage was rented for a measly $125 / mo from the previous owner.  I had the garage emptied so I could start from scratch with it after closing.  The garage is (but not for long) in pretty bad shape.  The building is from the 1930's, and its just been structurally hacked together so many times throughout  the years. It'll be going under construction this weekend by myself and a buddy to fix the roof sag, and the majority of other structural areas needing attention.  And also the leaking roof will be fixed and re-shingled w/ style to match the property. I know that I will have no problem renting out the spaces for a total of $400 extra income.  But aside from the bonus in cash flow that it will bring, I was curious to if the repairs and roof done to the garage will in fact add value to the property at all!? Like is there any ROI with these things? I'm under the assumption that a property being sold with a 30yr old roof in need of replacement would be valued (or even assessed) at a lower amount than the same exact property that just had a 30yr roof done? Any and all thoughts much appreciated! Thanks BP :)

Nathan Gesner · Answer

The value depends on the buyer. Another investor will see the value differently than someone occupying it as a primary residence, but it still carries value in both cases.

Matt Romano · Answer

awesome @Nathan G. thanks for the info. And that calculator / chart will definitely be saved for reference! So unlike the units rent value affecting property value, would a garage with an awesome history of rent add value? Or still just be looked at as a bonus?

Nathan Gesner · Answer

There is value to a detached garage, regardless of income.

Check out this handy remodeling cost vs. value calculator. It's not perfect but it gives you a rough idea of the value of a remodel. When flipping or renovating, it's important to put your money in the right place. Will you get a better return adding a fourth bedroom or a second bathroom? Should you convert the attached 1-car garage into additional living space?

You can easily pour $10,000 into a renovation that will only increase the sale price of a home by $4,000.