How to Have a Garage Count as Living Space for an Appraisal

An appraisal is a professional, unbiased opinion of a home's value. Appraisals are required when you buy or sell a home and when you refinance. Lenders require appraisals so they don’t lend more money than a home is worth.

The size of your home is one factor an appraiser uses to calculate its value. Other factors include its location, the quality of its construction, the number of bedrooms and bathrooms and the current real estate market. The size of a home is measured in square feet of living space, which does not include a garage.

Total square feet of living space is different from total area under the roof, another type of home measurement. Total area under the roof includes porches, garages and balconies. You may need this measurement to get a quote for building and engineering purposes, but it’s not used for appraisals.

For a garage, which is basically a large, unfinished room, to be counted in an appraisal as living space, it has to meet certain standards. First and foremost, the conversion from garage to living space has to be properly permitted. You can’t just install carpet and drywall and call it done. Building permits are usually issued by the county in which you live, but be sure to check with the city or town too in case they have additional requirements.

If you hire a professional contractor to convert your garage, he will obtain the proper permits for you. Depending on the scope of the project, electrical, plumbing or mechanical permits may also be required.

Either way, your converted garage will have to meet the standards set by your municipality to qualify as living space. It should have the same quality of construction as the rest of your house. It must also have heating and air conditioning that is comparable to the units in the rest of the house. It should also be accessible by a door or hallway without leaving the main house.

Building permit requirements for garage conversions will stipulate how high the ceiling needs to be, how much natural light and ventilation must be available and even how many light switches and electrical wall outlets must be installed. Grade requirements may also apply. If even part of the garage is built into a hillside, an appraiser may consider it to be below ground level and not include it in an appraisal.

All of these requirements may seem onerous, but the consequences of an illegal conversion can result in fines, your homeowners' insurance policy being canceled and demolition of the unapproved work. It’s not worth the risk.

Another thing to consider in converting your garage is that once you’ve made it into living space, you no longer have a garage for cars and storage. You may be OK with trading your garage for more living space, but if you decide to sell, potential buyers may balk at no garage.

Be sure to find out if your county is one that requires a certain number of covered, off-street parking spaces per residential property. If you live in such a county, eliminating your garage by converting it to living space may mean that you have to build another garage or at least a carport.

If your garage is unattached to your house, it will not be included in an appraisal as part of your house’s living space. This is true whether or not it’s been finished. However, an outside garage that has been converted into detached living space could add value to your property as a guesthouse or in-law unit.

Two-car garage square footage is about 675 square feet, which far exceeds most counties' minimum requirements to call it living space. Converting it to living space can make a big difference for a growing family or for accommodating an elderly parent. Just be sure you consider the pros, the cons and the rules.