Will A Garage Conversion Increase Home Value More Than The Cost?
One way to add value to a single family property is a garage conversion. A garage conversion increases the square feet of the property. Many properties in the foothills are amenable to this kind of improvement. Depending on the situation, such a project may increase the value of the home more than the cost..
Foothill properties often comes with extra build-able land. Extra land makes it physically possible to convert an existing garage while at least preserving the option of a new detached garage now or in the future.
The value created in a garage conversion may or may not immediately exceed the expense of doing so. Particularly a two car garage converted into a master bedroom/bathroom suite with level approach and guest quarters potential might pay for itself depending on other factors
How can you know for sure? The best way to predict is to get an appraisal. Appraisers use a “hypothetical assumption” that the conversion is already complete. In other words, they will appraise the home as it stands now but also appraise it as if the project were done! This will tell you a dollar figure estimate for the difference. If the difference exceeds the cost of making it happen, then doing it is a fairly simple decision. However, even if you break even or else lose money initially, there may still be a reason to go forward.
STANDARD OF THE NEIGHBORHOOD
Homes sell when they meet the selling standard of the neighborhood. And, these standards tend to evolve over time. Older homes often don’t keep up. A conversion of an older home may add critical square feet to the main home. Sacrificing the garage, for now, knowing that you or a new owner could build one later, allows you to enjoy a bigger house right away, while not precluding an updated larger garage (with office?) sometime in the future.
If most homes in your neighborhood have three car garages while yours has only two, building a detached three car garage, in addition to having converted your two car garage into more gross living area, could be what makes your home competitive over the long run. If such an improvement keeps you up to date with neighborhood standards, then it may be worth doing. A “before and after” analysis be a licensed appraiser would be the first step toward an informed decision.
TODAY’S FOOTHILL HOME
Today’s home in the foothills is larger, and often features a master suite with master bath, a tub as well as shower, a walk in closet, and a slider to a private deck. What if your former garage could provide all that without needing to build a complete new wing to the home? Perhaps it can.
For example, a 1980’s 3 bed, 2 bath ranch home of 2000 square feet with an attached two car garage. This would still constitute the majority housing stock in most Sierra Nevada foothill neighborhoods. However, the building boom of the early 2000’s would surely have added a lot of newer housing stock nearby. Thus, the “selling standard” would have evolved. The 1980’s home would be depreciated by comparison.
What if you could take an older, smaller, $450,000 home built in the 1980’s, and turn it into something that can compete with a larger, newer $600,000 home built in the 2000’s? When it comes time to sell, part of the appreciation would be based on the higher total investment. Money sunk in now, might work for you over the long term.
MAKING AN OLDER HOME LIKE NEW AGAIN
Among the differences between an older home and a newer home are that the newer home is likely larger, built of more modern materials, has a three car garage, a granite kitchen, a contemporary master bed/bath suite with walk-in closet and slider to a private deck, bull nose edging, cement fiber lap siding, a composite deck, stamped concrete walkway, and a host of other improvements to numerous to itemize.
If you could retrofit the older home to have some or most of these features, and do so for under $150,000, then the net “cost” would be zero, assuming a $450,000 house is worth $600,000 when all is done. But even if it does not ‘pencil out’ initially, the widened the appeal of the home might attract wealthier higher-end buyers.
Of all upgrades mentioned, arguably the most important would be more square feet. The cheapest way to get this would be a garage conversion. If one had to decide which upgrade is most, the converted garage, used as a new bedroom-bathroom combination master suite or guest quarters would be the most likely improvement upon which all else might turn.
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