Need some guidance

[Kevin Del Valle]

Good afternoon everyone.

Hope you all having a wonderful day. 

I'll give you all a simple explanation and see if I could get some insight from any of you. I'm pretty new regarding this whole world of investing honestly...

Me and my wife bought a house for almost 2 years; first timers. It's a 3 bed/ 2 bath with garage. We aren't using the garage at all and aren't planning on doing so, so we thought on making it a living space separated from the house for rent, which we'll sacrifice 1 of the bathrooms to add it to it, and later on do the same with 1 of the rooms as well, though I would have to make an extension to add the rest (kitchen, bathroom, etc.) so that way we could take advantage of the space we aren't using. 

We currently have some money that we could use for renovations, but we don't know if we should use the equity for that instead or use it to put it on a different property. We haven't appraised the house after a couple of things that we have done on it either so...that could give us some more equity to work with. 

That's why we are pretty much stuck on all this.

[Kevin Sobilo]

@Kevin Del Valle, first you don't mention the type of neighborhood or the zoning there. Sounds like a single family home with an attached garage which to me sounds like it could be R-1 single family only residential where you are unlikely to be allowed to add additional units unless you're in a state  forcing municipalities to allow ADUs of some sort.

So, the first thing I would look at is whether you would even be able to take on this project.

One other thing to keep in mind is appraisals are estimates not exactitudes. So, unless you did some substantial improvements were made you may or may not have an appreciable difference in equity. Appraisal estimates are a moving target.