Garage Conversions - 5 Things to Think About
Garage Conversions - 5 Things to Think About
Full Video Transcript Below
[00:00:00] Well, good afternoon real estate fans, Alice Lema here again, I'm a broker here in beautiful Southern Oregon. I work for John L. Scott real estate, and this is our weekly podcast. And today we're going to talk about five things to think about before you do a garage conversion because you know, garage conversion, people talk about it all the time.
[00:00:18] Oh, we can do this. We do that. But you know, there's some things you need to think about first. Pluses and minuses. So we're going to go into that just in a quick second. First, I want to invite you to subscribe to our channel. This is educational. I want your thumbs up. I want some comments. I want to know if you're getting much out of it, please share it with your friends and yeah, just let me know what you think.
[00:00:39] And shout out to Holly. My friend sent me a request last week. My glasses were falling off my face last week, so I got them. Got a new pair of glasses, actually. So thanks for that. Okay. So let's get on with our podcast, five things to think about before you consider converting your garage into living space.
[00:00:57] So this is a real fun one because garages are kind of are ready to rock and roll as far as converting. It's already, a lot of times have cement and electricity, sometimes water. And if not, then make note of that because you're going to have to pay to have that put in. But the first thing I want to talk about before we even go to the construction site, the first thing want I talked about is the value of the converted space and also the resale capability of a converted space.
[00:01:25] Cause people think, oh, well, I'm going to turn it into a family room and an office or this or that. And my property is going to be more valuable. Not, not, not really. So what happens is, and I was surprised to learn this too, that appraisers frequently give a certain bump up in the value for having a garage.
[00:01:47] And if you're just adding more square footage, they just add on those feet to the whatever price per square foot you've got going on in that place. And it doesn't always add up to the same amount of the garage would.
[00:01:57] So it kind of depends on where you live as well. You know, if there's a high, high demand for living space, then that's a little bit different. But for the most part garage converted to living space are not super valuable.
[00:02:12] However, having said that if you convert it into a legal capital L not illegal, but legal apartment, something like that, where you're getting rent and at least in our area, you got the city involved, they inspected it they get its own address. They gave you. Own utilities, that kind of thing. You go through all that, you got all your permits, then that living space, that's now rental income. The appraiser actually would give quite a bit of value for. So it just kind of depends on what you're going to do with it, but I just don't want people walking around thinking, well, I can just convert that garage into a blah, blah, blah. And my property is going to be more valuable because it's not always the case.
[00:02:55] Okay. So value and resell because the other thing is, if you're going to move, if you're going to sell your house, three to five years, maybe do the conversion. So you can unconverted and put the garage back. Then it would be a really swanky finished garage.
[00:03:10] You put the door back, something like that. That would probably be a good idea because a lot of people buying homes, they want that garage and they want the door that goes up and yeah. They don't want another room. Okay. So that's number one, value and resale.
[00:03:25] The second one is cost. Now cost can be in my opinion, anywhere from just a few hundred dollars, because you're just going to put a fake wall in front of the existing garage door. You're not going to do anything else. And you're just going to kind of use it as. Like an overflow room or office or something like that, which just a tangent, not all the municipalities want you using your garage space as an office, without them being involved because they have health and safety measures that they want you to follow.
[00:03:58] Okay, but we'll talk about that in a minute. So garage conversions, if you're just doing super vanilla, simple, just putting up like some dry wall or some fake walls and leaving everything else in place. Well, that could just be a few hundred dollars, especially if you do it yourself, but it could also be up to, I don't know, I've seen some people convert their spaces and spend 25, $30,000.
[00:04:21] Especially if you're turning it into some kind of rental situation. You have not only the construction costs, but you also have a lot of fees that the municipality charges you to, to turn it into a separate address. So yeah, so actually, if you're turning into a separate address, I would budget probably more like 35,000 just to be saving. It depends on where you live, you know, not all zip codes are equally expensive.
[00:04:47] And if you're just doing it for your own use, then maybe eight to $10,000, that could give you like a little wet bar. It could give you flooring, extra insulation, maybe some kind of heating and cooling system.
[00:05:00] So, yeah, so, you know, maybe budget somewhere between five and $35,000, depending on what you're going to do with it. And also you're going to want some kind of locks and security and, and things like that. And it does, you know, go up fast. So make a good list, get a lot of bids and just work that into your decision. So that's number two is cost.
[00:05:23] Number three is storage. So garages are like our catchall place for a lot of us. We also put our cars there. Some people, some people use them instead of a storage locker. Like if you have tenants, this is kind of a thing landlords should be careful of because if tenants are using the spaces as a storage, you want to make sure you're going in there every so often to make sure they don't have flammables, make sure that there's space between the stuff in the wall and the door.
[00:05:50] Yeah, so, but that's like, we should, we should have another podcast on that. Like how tenants actually used their space and what to be, what to be careful of.
[00:05:58] But storage in general is hard to come by. So if you're taking the storage use out of the garage, then how are you going to replace it? Usually cause usually you do have to replace it with something. So carports. If the cars are going to be outside, if you have any kind of weather, whether it's hot or cold, you want to try to protect the people and the vehicle from the elements. Then you also have tools and equipment and just, you know, little project areas. So where is all that going to happen? So it's pretty easy to get like a little storage shed and you can put that on a foundation, put that in the backyard. You wouldn't be able to put a car necessarily in that.
[00:06:35] Well, some people will get a bigger storage shed to do that. But we're talking more about like a like a little 10 by 10 or something. So you can put your tools and your project stuff in there. I've seen people finish those. I've seen them add electricity with a permit, please with the city permit.
[00:06:50] So you can make those more comfy. I've even seen some people put in little tiny wall, air conditioners, a little tiny, tiny heater. So it just depends on how long you're going to be out there, I guess. So figure out what you're going to do about storage. Cause you really do want, want to replace it.
[00:07:08] Another idea is some, some people have neighbors with lots and lots of storage. And I know this sounds kind of weird, but you could approach one of your neighbors and rent out their space, or maybe they let you use their space for free. So yeah, sometimes you'll see gates between two neighbors. Sometimes that's what that's for.
[00:07:26] But yeah, so you could either get public storage to replace yours. You could put something else on your property. You could hit up one of your neighbors, friends. So that's number three is storage.
[00:07:37] Number four, permits and taxes. So in Medford, they want to be involved. If you're taking that garage and going to use it as an office or a bedroom or a bonus room, they just want to make sure everybody safe and healthy.
[00:07:51] So you definitely want to talk to your municipality, find out what the rules are. Find out how many permits are involved. What is the timeframe? If you're like Oregon and you're in a little bit more of a shutdown again, then all those timelines are extended. So, and also getting people to help can take more time.
[00:08:08] So get all that information, the permits, the helpers, the taxes. So, and this is a kicker. If you, if you increase the value of your property, then the taxes on your property will go up. And a lot of people don't realize that. So. You hit up your assessor's office and kind of talk to them in general, like what might your increase be if they're, if they're able to tell you that that will sure. Be nice to know. Let's say you don't get like a really big tax when you weren't expecting it. Okay. So that's number four, permits and taxes.
[00:08:43] And number five, parking. Parking regulations and HOA. So HOA is homeowner association. If you live in a subdivision that is gated or has rules, or has a governing body, that's usually, there's usually an HOA, a homeowners association involved. So if that's the case, I would go to them first. And actually they might even have their rules online telling you what you can and can't do to your property.
[00:09:11] Because you don't want to get all excited. Or worse, go down and talk to the city or give a contractor money when you are living in a neighborhood where they don't let you do that. So find that out first and then the parking regulations are, again, something that kind of sneaks up on us because certain, certain cities will require that you have a certain number of parking spots on your property, and I'm not saying they all do. But you want to find out what that is because if you're taking away parking and the city has a rule about that, or your area has a rule about that, you want to be able to go show them how you're going to replace it.
[00:09:45] Okay. And I really I'm a big rule follower. I don't recommend sneaking around and trying to do this on the down low. I just like people to be up front, go talk to your county, go talk to your city, find out what the rules are. And you'll also be, I think pleasantly surprised that a lot of those people that work for the city and the county that you're in are there to help. And they talk to people every day about this kind of stuff. And they can actually give you some tips. So I get some of my best ideas from our city and county helpers. So do go talk to people, be aware of what the parking regulations are, be aware if you've got any homeowner rules and yeah. And so then you're going with those five ideas and you're fully informed and you'll have a much better experience and you'll do it in a way where it's not going to affect the resell as much, at least with without it being a surprise.
[00:10:38] Okay. So the last thing, and this is just like a bonus tip. You could build an addition onto your property. So like you have another garage or you add on to the garage, you have, you know, what else you could do? You could list your house for sale with me and let's go find you a bigger place that has all that so you don't have to go through it.
[00:10:58] Okay. But if you do want to go through all this, at least you'll do it with some awareness and education. Okay. So those are our five tips for garage conversion.
[00:11:06] I'm Alice Lema broker here, john L. Scott in Southern Oregon. I want to be your agent. I'm a great listing agent. I'm a great buyer's agent. Work with investors. Work with tenants. Anything you guys need?
[00:11:17] Give me a call. Give me a text I'm around all weekend (541)301-7980. Have an absolutely beautiful Southern Oregon. Wear your mask. See you next week. Bye now.