Appraisal Journal on GCUs: they could be worth more than you think
Some renovations aren’t actually recommended, especially if you’re thinking of selling. And if you’re doing the work specifically to increase the overall equity in your home, you’d better keep reading.
Garages have a significant impact on the overall value of a home, says Caesar Hoyos Real Estate Agent from Downey, Ca. If you don’t have a garage at all, buyers won’t usually take the time to look at your home, and a house with no garage is certainly going to sell for less than one with a garage.
In fact, even though it’s fairly expensive to add a garage, continues Hoyos, it is well worth considering the addition, as “the return on investment can be quite high.”
Where you live matters, too.
The Appraisal Journal publishes a research paper about residential properties with Garage Conversion units (GCUs). The paper describes an income-based method for appraising properties with GCUs, and concludes that using an income-based approach can give appraisers a valuable counterpoint to results from the frequently used, but often problematic, sales comparison approach. In the case of 14 Portland properties sold from 2006-2011, valuations by income were significantly higher, on average, than actual sales prices, by 7 or 10 percent, depending on the exact formula used. Here’s the press release, which includes (at least for now) a link to the full report.
Los Angeles Realtor Marcio Ramirez is of the opinion that eliminating a garage outright to create more living space usually helps home equity and later may help further the homeowner at the time of selling. His advice would be to consider a garage conversion. Hoyos agrees, saying that remodeling an existing garage “is almost always a great move when it comes to resale, as people value a remodeled garage more than picking up another room.”
However, if you’re simply adding a living space on top of the garage, Ramirez says, “this is really when you get the most out of the ROI. We all know how awesome it is to add another bedroom to the listing.” Unfortunately, the Sb 1069 law does not include construction of that level be done..yet.
They are three questions that you should consider when converting your garage into a residential living space.
1. Is it legal to convert my garage to a residential living space?
As with anything else- it’s important to consult with your local City Hall Planning Department, read up on current local laws, or visit our Facebook Page for any updates on SB-1069. In short, the answer is yes. It is legal. Converting your garage into a rental unit can be done the legal way- it just takes the proper permits when converting; all of which Eco Solar Home Improvement will take care of for you. All of our conversion projects are completely legal.
The issue that many homeowners could run into regarding the legality directly relates to a membership in a homeowners associations. In many cases, a homeowners association calculated the number of parking spaces by the number of spaces available in a garage, therefore converting the space can cause a conflict- but every homeowner’s association is different.Some parts of Los Angeles 90001-90100 are not as strict with parking spaces. We will be honest with you about your project and can save you a ton of time in regards to authenticating its legality. Keep in mind if it’s illegal, we won’t do it.
2. How big is the investment I’ll be looking at when converting my garage?
Garage conversions can become less expensive than you’d expect. Of course, there are many variables which determine the cost of completely converting a garage into a living space. Depending on your conversion type, garage conversions are involved with all construction trades from planning and foundation to framing, plumbing, electricity, roofing, even Solar Panel to make itself sustainable all of those make a huge difference in the construction costs but in general if you are doing it legally and professionally, a garage conversion costs starts at $25,000 and up to $70,000 to the more complicated ones.
3. Could a converted garage Generate Income?
– Researched statistics state that the average cost for a studio rental unit in Southern California is in the area of $800-$2000 a month for a newly constructed studio in a downtown area. The benefit to you as a homeowner is that YOU don’t have to pay rent for space like property owners do; you’re already paying for space you could be used to generate some cash inflow. And the best part? Depending on the terms at which you take in a tenant- you can stop renting whenever you like and utilize the space yourself for you and your family without the worry of losing out on an investment.
Garage apartments are on the rise, as The Washington post reports, and the rise in singles will change the rental market. The focus on smaller, more efficient spaces for singles is becoming more and more predominant- the market is growing. Perhaps it’s time to cash in on that goldmine of potential income and consider converting your garage today. And even if housing a tenant isn’t for you- converting your garage adds additional square footage and functional space to your home or for your as an office space, a workshop or even a gym the possibilities are endless.
Eco Solar Home Improvement is becoming the premier garage conversion, garage building, and garage remodeling, specialist. We utilize only the highest quality materials and advanced technologies when we take on any garage remodeling or garage conversion project. Whether you are looking to convert your garage into a living space, convert your garage into an apartment, convert your garage into a studio or game room, build a garage addition or do a complete makeover and build a brand new garage, our experienced design consultants are eager to help you create the garage conversion of your dreams. We offer a satisfaction guarantee on all our services. Choosing us for all of your garage project needs is one decision you will enjoy for a lifetime!
Interested in learning about how much an Eco-Green Garage could save you? Click here for a free, no-pressure quote.
For more information, visit us at Ecosolarhomeimprovement or give us a call 323-736-1949