Cost to Convert a Garage Into a room

[Derek Anaeme]

Hi all, what would be the average cost to convert a garage of about 500sqft into a livable room with a bathroom. The entire space would need to be updated from the ground up. What would be the most expensive part of the reconstruction? The location is Los Angeles, 90028. 

Thx

[Joseph Cacciapaglia]

I'm sure someone else will provide a more accurate answer to the cost question than I could, but I wanted to address the strategy in general. I think understanding what exactly you're planning to do, will help you get a better estimate of the cost. Maybe you've already thought about all of this, but it may help someone else in a similar situation. Converting a garage to livable space is one of the "value add" strategies that new investors seem to get wrong more than any other strategy I see. We have a ton of properties in my market that have a poorly converted garages. They typically sit on the market longer when they're flips, and they rent out slower and for less money when they're a BRRRRs. There are even some investors that reflip these homes with a conversion back to a garage.

Don't get me wrong, if the strategy is employed properly, and you get real usable square footage out of it, then you can truly add some value to the property. There are a few things that you have to be sure to get right for it to work:

1. You need to make sure you're addressing parking. If all of the comps in your neighborhood have a garage, you may at least need to put up a carport to be competitive. Many new investors don't consider this when running their ARV or rent comps.

2. You have to make it truly livable space. In addition to finishing the floors, walls, ceiling, it also should include ducting in the heat and A/C. Garage conversions that simply stick a window unit in, rarely perform as well in my market.

 3. You need to make sure the layout of the home makes sense with the entrance to the new room. Often the interior door to the garage enters through a laundry room, mud room, or kitchen. The conversions that I see that don't really work, don't change the floor plan to make the new space really work with the home. If you've selected a property with this conversion in mind, you may not have this issue.

If you're simply looking for estimates for the flooring, drywall/paint, plumbing, etc., you may miss some of the additional expenses that are required to really make the conversion work. Because of this, I would be wary of any number that someone throws out as an answer, without knowing how you're going to address the above.