Wholesaler · TX · Member since 2016 · 41 posts · 8 votes
Hello Fellow BP members,
I am looking to buy a 3 bed and 2 bath basic home from a local investor. The investor mentioned that the garage was converted to 4th bedroom and they have followed the HOA guidelines. I did some research on BP and other sites and there are conflicting views on where the garage being converted to 4th bedroom is good or bad. So I wanted to pose this question to find out if this will cause issues in getting tenants and finding buyers in future i.e. delay the process and impact sales price or rent? Should I ask the investor to convert it back to garage as a part of the deal (they are doing rehab as well).
In our experience, the 4th bedroom usually has more value than a garage as buy and hold owners. However, you mentioned an HOA. Be sure to check with them about parking restrictions. The conversion may have been approved but a family looking to rent a 4 bedroom may have teenage kids and need more than 2 cars in the driveway. If street parking is forbidden by the HOA, this could be an issue.
Investor · Plano, TX · Member since 2016 · 38 posts · 21 votes
10y
I would not buy a garage conversion for a rental property. It is more difficult to "sell" to a tenant. As a garage, they may choose to use it for the cars or for storage or as a gym or extra room etc. But if you have converted it, you take away their choice to park indoors. It eliminates a percentage of your target market.
Investor · Boise, ID · Member since 2011 · 1k+ posts · 736 votes
10y
Hi @Sameer Kh! It depends on what is normal for that community, and how much garages are valued there. I would think it would not be as big an issue in Texas as it is in a colder state. If the deal was right, I personaly would probably purchase it and rent it as a 4 bedroom. You could always convert the garage back when you choose to sell. Every market is local, so I would talk to a couple of experienced local property managers to get their take on it. (and Realtors, if you think you will sell soon).
In our experience, the 4th bedroom usually has more value than a garage as buy and hold owners. However, you mentioned an HOA. Be sure to check with them about parking restrictions. The conversion may have been approved but a family looking to rent a 4 bedroom may have teenage kids and need more than 2 cars in the driveway. If street parking is forbidden by the HOA, this could be an issue.
Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
10y
I would first see if permits where pulled for the work. Call the building dept for your area. They will be able to tell you. If there are no permits I would walk away. You will be suck with dealing with permits which could mean removing all the work done. If there are no other garages on the property then its a bad move all the way around. Where do you put the kids bikes at? Front yard?