Turning Large Garage into Secondary Suite

[Powell Slinkard]

Hello All,

I wanted to post this "idea" of mine and gather everyones feedback. The neighborhood in which my aunt lives has decent size land plots, my aunts house is approximately 4000 sq. ft. In addition to this she has what I consider a very large detached garage which I would estimate at 1000+ sq. ft. including the main floor and upstairs.  My "idea" is to convert this garage into a secondary home and rent it out. Now I know this is a feasible project but what I am primarily searching for is feedback on is how to finance this construction project. My thoughts on financing this is for my aunt to take out a home equity line of credit(or cash out refinance) to fund this project. At first thought some of you may see this as very risky but let me provide some more details. I would guess my aunts house is approximately worth $300k and she only owes about $70k to pay off the mortgage in full. My aunt is not very financially savy and therefore doesnt have much as far as saving/retirement/401k goes. And when I say she doesn't have much I mean it. But what she does have is 3 very hardworking sons with stable, well-paying jobs that would support her in the event that she had to stop working. What sparked this "idea" of mine was trying to figure out how to alleviate her financial commitments aka her mortgage. I know that the garage can be converted into at least a two bed/ two bath and generate at least $1200 in rental income in her neighborhood. The rental income would  then cover her mortgage payment and free that money up for her to put away for her retirement. To provide some more background details to shape your opinions let me say that I think my aunt would have to stop working before she could finish paying off the house, therefore her sons are going to have to start paying all the bills sooner than later. Again thinking ahead I figure why not take out the equity in the house to fund the project now and start generating rental income, versus waiting until my aunt passes away in X amount of years and her 3 sons  have to decide how to split up the house. Thank you all for reading this post, and any feedback would be appreciated. I know I didnt provide all the details and there are always variables, but hopefully the information I provided is enough for perople to respond with yes this is a logical, feasible idea. Or respond with no you are crazy and this is why..