Building a detached garage with apartment

[Ben Howard]

Hi my name is Ben. I live in Nashville, TN and am looking to build a detached 2 garage with 2/1 apartment above. I personally went down to Metro to get a building permit because I wanted to make sure what I wanted to do was even feasible for our property, zoning restrictions, etc. Prior to getting the building permit, I had the lot surveyed and site plan drawn up. Before starting the project I talked to a few general contractors that said the type of building I am looking for 25x25 detached garage would be $50K to build. Our plan is 24x24. We are in talks but still looking for a contractor. The project should be funded my early next week as we closed on the loan this week. 

For the numbers on the deal, the loan is costing an additional $235 for a total mortgage/taxes/insurance/etc number of $1120 for $55k in cash. I believe the rental value for the property including a two car garage is in the $1400-$1600 range. 

I'm looking for any knowledge or experience you can impart on a project like this, if you know a contractor that would be good, anything. Thanks in advance!!

[John Powell]

I’m interested in doing something similar here in FL. Following.

[Matthew Bolton]

Hey @Ben Howard, 

I am a GC here in Nashville.  Our focus is infill development but we do some remodeling and custom builds also.  Just throwing this out there for your consideration...we have been working with a prospective customer to build a 25x25 detached garage in Green Hills.  This particular build has nice exterior finishes but it does not include insulation, drywall, trim or paint on the lower level and has no second floor whatsoever.  Only rafter space for storage.  The cost to build alone, not including the builder fee is $35K.  We anticipate coming in under budget but it shouldn't be any less than $32-33K cost to build.  

Hope this helps, at least for budgeting expectations, as you work towards your build.  DADU's are a great revenue add!

Happy Investing!

[Jonathan Berry]

Would love to know more about your experience on this Ben.  So you are looking to build this garage / apartment on your current property and once complete then rent it out right?  When you went to the permit office did you notify them that is your plan once construction is complete?  If so, does that mean your home is currently zoned for 2 homes or do you have to rezone?  and will the apartment then have its own mailbox/seperate address than your home?  

I live in Nashville as well and while my current home does not have the ability to add a garage like you I really like this as a passive income structure for future projects!  

[Luka Milicevic]

@Ben Howard I'm curious. What did metro say?

[Ben Howard]

Zone Description

Medium density residential, requiring a minimum 6,000 square foot lot and intended for single and two-family dwellings at a density of 6.17 dwelling units per acre.

My lot is zoned R6, which is the description above. The description above is the only reason I thought I would be able to do it though I was still skeptical. So I went do to Metro for the Building Permit and laid everything out on the table for what I wanted to do, site plan with set backs from alley and side yard as well as existing structure, building plans, everything I could think of. I did this myself because I didn't want to get a GC involved if the Metro was going to shoot my plan down. In total, I went down to Metro three different times, each time making slight changes to the plan as they suggested and on the third trip I walked out with a building permit. This was definitely a learning experience. 

Another funny note about the experience...there are persons in there seeking building permits that represent companies building sky scrapers, wheeling in loads of plans on one side of the spectrum, then there's me who is looking to build a 24x24 detached garage on the other side of the spectrum. 

In order for the dwelling to be occupied we had to file a Restrictive Covenant with the Register of Deeds. Below is the first paragraph of the covenant which they give you with your building permit but you have to have signed, notarized and file with the ROD. I took mine down in person, though they say that they'll file it for you from the Permitting office. I opted out since I was taking off work and wanted to know that day the entire process was completed. Once at the ROD, they were able to file the covenant while I was there and give me a receipt that it was completed (it costs $10). 

RESTRICTIVE COVENANT FOR ACCESSORY DWELLING, DETACHED HISTORICAL IN CONSIDERATION of the issuance of a building/use and occupancy permit by the Metropolitan Government of Nashville and Davidson County for a single-family accessory dwelling, detached residence on certain property herein described,

The question regarding the double mailboxes - I assume so, but that never came up. 

I did get a landlord registration form in the mail from Metro the other day, so that seems to be in line with everything I've experienced so far. 

[Jimmy Silcox]

Hello @Ben Howard

I recently bought a place in East Nashville that has plenty of room for something like what you did.  I figured I could rent out the apartment above the garage for somewhere along the lines of $1500/month as well.  So, if my monthly costs are covered I could potentially bring in a little bit of passive income.  Anyway, you mentioned contractors were telling you it would cost $50k to build.  Were you talking about only the garage for that number and not the apartment?  I'm being told it would be in the range of $125-150k.  What size is the apartment you had built?  I don't think I could make the numbers work if it cost $150k.  Maybe I'm looking at building something too big.  How's the project coming so far?  Did they require you install sidewalks or do you already have them?  Thanks for any further info you can offer. 

[Luka Milicevic]

@Ben Howard what ended up happening with your project?

[Karen R.]

I'm considering a similar project in the Denver metro area, and seeking more info on costs. From this thread and elsewhere on Internet, appears to be $35-50K just for garage depending on location, finishes, etc.  My realtor advised me to budget $300K per sqft for construction costs in my area (Denver metro), but that seems excessive since for 900sqft apt. as it would add $270K on top of the garage cost. Anyone willing to share costs for a similar project?

[Matt M.]

Originally posted by @Karen R.:

I'm considering a similar project in the Denver metro area, and seeking more info on costs. From this thread and elsewhere on Internet, appears to be $35-50K just for garage depending on location, finishes, etc.  My realtor advised me to budget $300K per sqft for construction costs in my area (Denver metro), but that seems excessive since for 900sqft apt. as it would add $270K on top of the garage cost. Anyone willing to share costs for a similar project?

 I built a garage for ~$14k last year. That builder said turn key ADUs(garage with apartment) start at $125k. PM me for his info.

$300k per sqft for construction is higher end. It's in the low $200s right now (That ADU price not included in that figure)

[Gilbert Dominguez]

Ben, I would say that if you relied on certain specific GC's to provide you the quote that you depended on to know what amount to borrow for this project then you should go back to one of them , negociate your contract with one of them and have them do the build out for you. This way you will feel more sure that $50K really is enough and that your project can be done within budget, this is very very important. I do have many years working as a licensed GC so I kind of know what I am saying. 

Do not fool around with this. You planned your project, you got your permits, now stick to your plan and get it done for the budgetted amount. 

Other than that your numbers look good and this project should add both equity and income to your current situation. 

You have planned your work, now work your plan. There is nothing you could do worse than vary outside of your original plan, including the money it will cost you. If certain GC's are busy then wait until your plan and budget can be put into effect. Don't complicate things looking for lower bids either.You already know your numbers will work to the upside, stick to that.

[Adam Egloff]

Just checking to see how this project turned out price wise and also the one for Karen in Boulder. This would be a good idea if the price was right.

[Alan Good]

Also interested in how this turned out @Ben Howard!  Considering the same here in Nashville

[Shaun Slater]

Also want to stay updated on this project. I’d like to do something similar. I live in the Chicago suburbs with 2 acres of land. 

[Eric Nelson]

hoping to do this sort of thing!  What's the word boss?  Did you get it completed?

[Mercedes Smith]

I'm also interested to hear what the cost to build per sq ft ended up being? Thanks.

[Darcy North]

I'm also considering a similar project and I, too, am in Nashville. I'm curious how it all panned out. I have the property but will likely need to be rezoned etc. Would love to hear where the numbers fell out or if you've decided to hold off until the market (and contractor availability) cools. 

[Ryan Lee]

I'd like to do this in Richmond and am really interested to hear the cost of this project beyond the shell.. updating electric, plumbing, appliances. Thank you!

[Lanash Latheef]

I have a room (2 rooms separated with one door and a step ledge in between) on the side of my home that currently houses storage, water heater, and laundry. I was thinking of moving the laundry and water heater stuff to another part of the house and then convert that whole area into a 1 bedroom, 1 bath and kitchen (not too sure about the kitchen) and then rent it out. The room with the laundry already has a sink in there and there is electricity (multiple outlets) already set up. Do you think this is a smart idea? I know the rental market is really hot right now in my area. Any advice on what I should do to get started? Architect, GC, Realtor?? BTW this will be my first move after listening and reading everything here.

I'm planning to fund this by refinancing my home.  Just not sure if this would be smart or take the money and try to find another unit to purchase and rent? Please help this newbie.