Fix the 1 car garage or Build a 2 car garage?

Question

So I just picked up this property in South Euclid, Ohio. We are still not sure whether we are going to rent or fix n' flip this one, but I am going to ask the question anyways. The house should fetch about $900 a month in rent.

The 1 car garage the house currently has needs:

A new slab, so it needs to be jacked up - $3000
New roof - $1500
Scrape and Paint - $1000
Total - $5500.

I got a quote for a new 2 car garage: Monopour foundation/slab, 20' x 20', vinyl siding, man door, window. $10,500 total price.

What do you guys think I should do? Does a 2 car fetch considerably more rent?  Will it largely effect the sale price?

Pictures (6) - http://imgur.com/a/sJ3MS

Account Closed · Answer

It sounds like the 2 car is the way to go for rents or value; however, I'll also say it sounds like your bids for work to the 1 car garage may be too high as well.  Assuming this is a normal sized one car garage anyways..

Will Barnard · Answer

Based only on the stats you gave me in your reply, I would go with the 2 car addition.

William Bannister · Answer

Wow I feel for you it sounds more like you live in Tyranny falls Ohio.
 I left Oshkosh Wi. years back partly because of the tyranny of codes by local building inspectors/nazis. Leaving that cold climate up in WI coming to the Ohio river valley was the best thing I could have done. Shorter winters less code enforcement /tyranny and cheaper deals as well as better roi.
   I would just do the 1 car because its cheaper your probably better off if you can save 5k, That 5k is a down pmt on another property at under 50k. Just make up cashflow of 75 dollars a month by using capital on next deal.  Wouldnt roi suggest that? compare roi on 5k generating 75 per month vs roi on another rental's cashflow you buy with that 5k.
   Im not sure though what 5k buys you but even if its half a down pmt  is worth it. If your next property has a 300 dollar cash flow it makes sense to use 5k on next deal because cash flow would return double to you monthly in new deal over what old deal did by putting up 2 car garage.  I cant quantify what your vacancy ratio is on a home with a one car vs 2 car because I do agree with above post that homes with 2 car garages rent like hot cakes. 
   Also Im not sure the 5k you saved is money saved if the home is in a nice area and would be an easier flip with a 2 car? Is this home have a quick exit strategy or hold for long term rental. I think if you plan to sell it within 5 years I would put in the 2 car.
   If this was a lower end rental nah one car is good enough but I am sensing this hood is pretty nice with 70% 2 car garages. This might get me thinking 2 car is the way to go and flip this nice little home and get a faster turn on your capital if you can.  
   If your just keeping this as income property remember these large garages are a pain to clean out if you ever have a tenant that likes to hoard or set up a shop in the garage. This will much more likely happen in a 2 car garage then a 1 car especially with electric that the city is shoving down your throat.
  On a lighter note could we joke about burying your code enforcement inspectors with that electric line to the garage? That is so weird they make you have electric in your garage??

James H. · Answer

I'm not sure what you mean by you can't rebuild it and therefore your options are to fix it or replace it...

Based on all the other additional information about permit costs, escrow, etc, it sounds like just putting in the 2-car garage may be a good option.

Kyle Hipp · Answer

I think your cement price at $4,000 for jacking up and out the old slab and putting in a new slab is a decent price. In my experience recently building a new 2.5 car garage the city did not allow me to touch electrical, cement work, or framing. We could side the garage, roof the garage, wrap the garage, dig the trench for electrical. One thing you might wanna look at is if you can run electrical right from the pole to the garage. It might be cheaper than digging a trench. It will be overkill for a garage but you mentioned that it was a more owner occupied neighborhood and that could be a huge selling feature for a buyer to have a garage that they can have a properly powered shop in.

As for your other prices, I still recommend going with the 2+ car garage for the rentability and value play. I believe you can get the roof done cheaper and to reside with vinyl is cheaper and you can easily do that yourself in a weekend.

Rob K. · Answer

You're REQUIRED to have electricity in a detached garage?

Christopher Boggs · Answer

Rob K - I see what your saying, but unfortunately its not an option. The city requires I rewire the garage, and that I bury the electric line from the house.

Rob K. · Answer

Christopher Boggs I don't have advice to give you as far 1 car vs. 2 car.

However, I usually remove the electricity from detached garages on my lower priced rentals. Not sure of the values where you are. It seems that garage electricity is always rigged up by some hack that thinks he knows about electricity and it's usually a mess. Instead of bringing it all up to code, I will tear it out. I don't want a bunch of hillbillies working on cars out there or using it for a man cave anyway. One of my tenants turned the garage into a "dojo". I think he saw too many episodes of Eastbound and Down.

Also from the pics, that garage looks a little sketchy. Is that a flat roof? If yes, I've had nothing but problems with flat roofs. I would either tear the garage down, build a pitched roof, or build the new garage. I would not replace that current roof with a flat roof.

Christopher Boggs · Answer

Brian Hoyt & John Chapman - Rebuilding or Fixing the garage is not an option. South Euclid requires you to fix or replace the garage. I also had to put up 25k in escrow funds in order to purchase this house. I don't get those escrow funds back until I finish all the repairs including the garage. Also Carports, Pre-Builts, Polebarns, and bascially every other cheap option doesn't meet their building code. Btw the cost of $10,500 includes permits

Electricity - The wiring is way out of date and I am required to replace it all anyways. Its is also disconnected from the pole, and I am required to run underground electric from the house. So really the cost of electric is the same excluding the 2 car having a few more outlets. I will need permits either way, and If I don't get them I won't get my escrow funds back

Driveway - I have to re-surface or replace the driveway anyways (not sure till the snow melts) Either way I got a quote of $500 to extend the appron 10' x 25' to accomidate the larger garage, and yes there will still be some backyard left.

Costs

Slab - I got a few casual estimates of $3000, but I had a concrete guy come out today and he quoted $4000 to jack up the garage, tear out the slab, and put in a new one. Which I think is really high, but I found out that in our area the concrete guys gouge in the spring/ early summer since everyone wants stuff done. Due to the weather we can't start pooring here till mid-march

Roof - I estimated this cost, so maybe $1500 is high, but some of the roof boards need replaced. What do you think it would cost?

Paint - again I just estimated. I haven't had to paint the outside of any of my properties yet. What do you think that should cost?

Will Barnard - The houses on both sides have two cars, overall I would say in this neighborhood 70% have two cars, and 30% have 1 cars. Also most of the new garages tend to be two cars, but this is a nicer block of South Euclid that doesn't have alot of rentals

Sam W. - Do you know any reasonably priced concrete guys that work the east side? Also  any ashpalt guys?

Huggy Baird - Same Question - Do you know any reasonably priced concrete guys that work the east side? Also  any ashpalt guys?

Will Barnard · Answer

I suggest getting more bids first off.

Secondly, without knowing your market it is hard to say, but if other homes have a 2 car and yours only has a 1 car, you are best served adding the 2 car (with permits). If all other homes in this area all have one or no car garages, I would not suggest spending the money on it.