Do garage conversions add value?

A garage conversion is a quick way to increase the size of a house, but does it add to the overall value of a property? Here are five reasons why garage conversions tend to not help increase market value in the Sacramento area:

  1. No permits:  The conversion was done without permits (illegal).
  2. Not typical:  Garage conversions are not common in the neighborhood.
  3. Low Quality:  A partition and carpet in the garage really isn’t a very high-grade conversion, is it?
  4. No Storage:  Removing storage in a garage is not a plus in the eyes of most buyers. If there is no garage, where are you going to keep your bikes, tools, unused exercise equipment and holiday decorations? If a conversion is done properly, it may be appealing to buyers, but any increase in value may be offset by the negative of no longer having storage space. 
  5. It doesn’t feel like the rest of the house:  A converted garage often does not feel like the rest of the house because it still has the feel of a garage (despite sheetrock, a heat source, floor covering, windows). A converted garage is often on a lower foundation and it still contains the water heater and washer/dryer too. If some of the living area doesn’t conform with the rest of the house because it is lower in quality, the market will likely not give that portion as much value. This means the extra 400 square feet in the converted garage is usually not regarded the same way as an addition on the back of the house. Applying this point means a 1400 square foot house with a 400 square foot converted garage is probably not seen the same way in the market as an 1800 square foot house with no conversion.

What does this mean for home owners and buyers? You may not get the most bang for your buck in the resale market when converting a garage. If your conversion is done in a professional workmanlike manner though, maybe you’ll come out mostly even (this depends heavily on the quality of conversion and acceptance of conversions in your neighborhood). Ultimately, without regard to market value, if you need more space, converting a garage is a fairly inexpensive way to make that happen. Just keep in mind your future plans to sell the property and how your particular conversion might be perceived in your real estate market (and how much it might cost in case you need to turn it back into a garage).  

Any points you’d like to add? Would you convert your garage? Why or why not?

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook


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