As homeowners search for ways to up their property’s value in this competitive housing market, converting a garage into an accessory dwelling unit has become an increasingly popular choice. And it’s not hard to see why!
An ADU not only adds functional living space to a property, but it also comes with several financial benefits, such as potential rental income, tax incentives, and more.
If you’re considering an ADU garage conversion, here’s a closer look at what the process involves and why it might be the right move for you.
Understanding the ADU Garage Conversion Process
Put simply, an accessory dwelling unit (or ADU for short) is a secondary housing unit on a single-family residential lot. While they can be built as freestanding units, garage conversions are one of the most practical and cost-effective ways to add an ADU to your property.
This conversion involves transforming your existing garage into a livable space, which can function as a rental unit, a guest house, or a personal office, to name a few.
Navigating the Conversion Process
Successfully converting a garage into an ADU involves several steps, starting with understanding local zoning laws and building codes.
Each city or county has its own specific regulations regarding ADUs, so it’s essential to check these before beginning your project. Securing the necessary permits and approvals ensures your conversion also complies with legal requirements.
Once you’ve got all the paperwork covered, then comes the fun part – designing your ADU!
We recommend working with a professional to create the layout. Not only does this help you maximize your available space, but it also ensures that your ADU’s design meets the building code for your area, preventing any unexpected delays once the contractor begins construction.
Speaking of contractors, choosing a reputable one is equally important to ensure that the conversion is done efficiently and passes inspection when the time comes.
Financial Benefits of a Garage ADU
One of the main advantages of converting a garage into an ADU is the potential for additional rental income. Depending on your location, renting out your space could add hundreds or even thousands of dollars each month to your pocket.
In addition to rental income, an ADU garage conversion can substantially increase your property value. Real estate experts agree that properties with ADUs often sell for as much as 35% more thanks to the added functionality and versatility.
Whether you’re planning to sell soon or want to enhance your property’s long-term value, an ADU can be a valuable investment.
Tax Credits and Incentives
Converting a garage into an ADU can also make you eligible for various tax credits and incentives. Many areas also offer local or federal tax credits to homeowners who make energy-efficient upgrades during the conversion process. These can include rebates for installing energy-efficient windows, insulation, or solar panels.
Research local programs and incentives in your area to help you offset some of the costs associated with your garage ADU conversion.
The Practical Benefits of an ADU
Beyond financial gains, an ADU offers several practical benefits. The additional living space it provides can be used for –
- Accommodating family members and guests
- Creating a home office or studio
- Adding extra storage space
- Expanding the square footage of your home
This flexibility makes ADUs a versatile solution for homeowners anticipating changing family needs or looking to enhance their property’s appeal to potential buyers.
The Expenses of ADU Conversion
As you can see, converting a garage into an ADU offers significant benefits, from additional rental income and increased property value to practical living space enhancements. However, this renovation comes at a cost.
On average, homeowners can expect to pay between $90,000 and $119,000 to convert their garage into an ADU. If this sounds like more than you’d like to pay out of pocket, a personal home improvement loan might be the perfect solution.
HFS offers flexible fixed-rate loans for all types of home renovation projects. We require no collateral and the qualification process is quick, easy, and hassle-free. We give you the loan and leave you alone!
For more information on financing options and how to get started with your garage conversion, contact HFS Financial today. Our experts can help you navigate the financial aspects and find the best solutions for your ADU project.