Garage Conversion Cost: Design, City Fees, Materials, Labor

Jan 3, 2023 | Garage Conversions, ADU

garage conversion can be a wonderful way to add living space to your home. They are oftentimes the most affordable ADU to develop and can provide passive income if you decide to rent them out. The only question is, how much does a garage conversion cost?

The average cost of a garage conversion is between $90k and $119k. The total cost is affected by several aspects, including your design tastes and the size and condition of your garage. There are ways you can cut these costs down though. 

Knowing all the elements of a garage conversion can help you accurately determine how much your project will cost. Read on to discover what affects the cost of a garage conversion, how to save on those costs, and how to finance your project.

Main ADU Development Costs

A garage conversion is a type of ADU (additional dwelling unit). All ADUs have the same four main development costs associated with constructing them.

  1. Design and planning
  2. City fees
  3. Construction labor and material
  4. Finishing materials

The design and planning stage consists of architectural drawings and energy calculations. The city fees include building permits and utility fees. The construction labor and material stage consists of the cost of contractors and conditions of the property, and the finishing materials are things like flooring and cabinetry.

Typically, a garage conversion will be around 20% to 25% cheaper to develop than a new construction unit. However, it is important to note that sometimes garage conversions can be more expensive due to demolition costs if the existing structure is not stable. It is all dependent upon your specific situation.

You should also take into consideration that ADU cost more per square foot than a typical single-family home due to the cost per square foot not being offset by large living spaces or extra bedrooms. Plus, they have several fixed costs from the city fees stage that you have to pay no matter what size your unit is.


Total ADU Garage Conversion Cost

Now that you have a basic understanding of the primary cost categories related to developing a garage conversion, let’s take a closer look at the average costs.

In the example below, we look at the average costs of your typical 2-car garage conversion. Where you fall within the price ranges will depend greatly on the size and structural form of your garage conversion.

How Much Does a Garage Conversion Cost?

Main Cost Category  2 Car Garage Conversion
Design & Planning $6,000 – $7,000
City Fees $3,000 – $4,000
Construction Labor & Materials $63,000 – $81,000
Finishing Materials $18,000 – $27,000
Average Total Cost $90,000 – $119,000

ADU construction labor and materials will average around $175 – $225 per square foot. An average 2-car garage ranges from 300 square feet to 475 square feet. Therefore, we did our calculations based on 360 square feet. Typically, the larger the unit, the cheaper the overall cost per square foot is.

A typical new construction 499 square foot ADU will cost around $161,700 – $201,125. As you can see, that is quite more expensive than your typical garage conversion. To help you determine which ADU type will be the most affordable for you, you can use this ADU cost calculator and this garage conversion cost calculator.

You can check out our free ADU Guidebook for more information on the different types of ADUs and the costs associated with them.


What Affects Garage Conversion Costs?

What Affects Garage Conversion Costs?

When it comes to determining your garage conversion costs, there are a lot of factors that can affect the overall price. How much you pay for your conversion can be drastically different than how much your neighbor or friend did. To help you get the most accurate cost prediction, here are some of the major aspects that affect conversion costs.


1 Condition of Existing Structure

The condition your garage is in will play a huge role in how much it will cost to convert it. Take a look at the foundation and soundness of the primary structure. Has the foundation begun to crumble, and is the wood starting to become brittle? If yes, fixing these aspects might be more expensive than building a new unit from scratch.

You also need to consider:

  • Does a footpath or front stoop (i.e. concrete work) need to be put in?
  • Does your garage floor need leveling or raising?
  • Do you already have electricity in your garage, or does a new line need to be run?
  • Do you already have water and plumbing, or does it need to be installed?
  • Do you need a new roof?
  • Is there any water damage that needs to be addressed?

Sometimes, it is best to demolish the current structure and start over. Thanks to new 2023 ADU laws, this process is now easier than before but still adds to your expenses.


2 Design Tastes

The major aspect of garage conversion costs that you can control is your design tastes. Opting for more affordable finishing materials and simple design plans can save you lots of time and money.

When picking out your ADU appliances and furniture, keep in mind price and functionality. Some things like laundry units may seem like a good area to cut costs but end up being one of the biggest ADU mistakes you can make if you don’t install them.


3 ADU Requirements

When building an ADU yourself, you will discover that there are some costs you can not avoid. This is because all ADUs have certain aspects they have to contain no matter what you intend to use the ADU for.

All ADUs must:

  • Be at least 150 square feet in total
  • Have a bathroom that is at least 30 square feet
    • Must contain a sink, toilet, and shower or tub
  • Have a kitchen that is at least 50 square feet
  • Have a living room and bedroom of at least 70 square feet
  • Have environmental controls like heating and cooling (HVAC)

So, although there are different ways to use an ADU that do not involve living within it, you still need aspects such as a kitchen and bathroom that will cost you money.


Other ADU Cost Factors

Some other factors that will affect your garage conversion costs include:

  • If your garage is under a powerline, it will cos you more to move/redirect the line.
  • You will need to consider installing a fence to offer privacy to tenants
  • You will need to consider providing an outdoor patio and area
  • You will need to run a sewer line from your garage to main source and it is more costly if it must go under the driveway.

To get a good idea of what factors will affect your garage conversion costs the most, talk to a local ADU professional.


Money-Saving Garage Conversion Tips

Although garage conversions tend to be more affordable to develop than other ADUs, they are still quite expensive. To help you save money on your conversion, here are a few tips.


Use The Pre-existing Structure

You can save a lot of money by working within the confines of your pre-existing structure. If the foundation and structure are in good condition, consider designing within the confines of the garage’s current layout and not trying to remove load-bearing walls or add extensions.


One Wall Plumbing

Try to keep all your plumbing within the same wall by putting the bathroom next to the kitchen. You should also try to keep your water heater and laundry near that wall as well to save on plumbing expenses.


Limit Tile Use

Tile is very expensive to install. You can use alternatives for your flooring areas, kitchen backsplash, and even showers. Talk with your contractor about possible tile alternatives to help you save on garage conversion costs.


Where Not to Cut Costs on Your Conversion

Where Not to Cut Costs on Your Conversion

There are some misconceptions about areas where you can save money during a garage conversion. The ones we listed above are all great ideas to save money on your ADU development. However, there are some aspects of converting a garage into an ADU that you should not cut corners on.


Cheap Contractors

When comparing contractor bids, it is important not to choose the contractor with the lowball bid. If their price is outrageously low compared to other contractors, chances are they are either:

  • Not licensed and insured
  • Don’t have the experience which can lead to costly mistakes
  • Are going to charge you hidden fees later on
  • Have terrible reviews they are trying to make up for

The best ADU contractor will have an affordable bid that is not super low. They will also be fully licensed and insured, experienced with ADUs, and local to your area.


Feasibility Study

Starting an ADU involves undergoing a feasibility study. A feasibility study will enlighten you on the possible challenges you could face once you start planning and building your ADU.

Skipping this step because you think you know already can result in your designs not being approved because they don’t meet specific regulations. This would mean you would have to pay to have your design redone. Plus, not knowing what challenges you are going to face can make them harder to overcome once you get to them.


Design Taste Aspects

Your design tastes can be a great place to cut costs. However, there are a few design taste aspects that we recommend not cutting costs on including:

  • Laundry unit to keep your tenants happy
  • Lots of storage for tenants’ belongings
  • Lots of windows for added natural light to make your unit appear bigger
  • Soundproofing so that tenants have privacy in their unit

One of the biggest complaints tenants have in ADUs is not having a place to do their laundry. Compact washer and dryer combos are a simple solution to this complaint.

Also, since garage conversions are small, they can appear dark and cramped. Taking the time and money to add lots of windows increases the natural light within the unit, making it appear bigger and homier.


Financing Your Garage Conversion

Financing Your Garage Conversion

Looking at all these costs can make some people wary about making such a big investment. However, the costs seem worth it when you take into all the benefits of a garage conversion such as:

  • Increases the value of your home
  • Multi-generation housing opportunity
  • ADU rental income opportunity
  • House hacking opportunity
  • Non-living space options

Not to mention there have been several changes in laws and regulations that make it easier than ever to finance an ADU. Here are a few ways for you to consider financing your garage conversion.


Government Grants & Loans

Homelessness has been a big issue due to the housing crisis. To combat the housing crisis, many states and local governments have developed various grant and loan programs to encourage individuals to build ADUs as affordable housing options. The more ADUs there are, the more housing opportunities there are for low-income families.

For example, California has the CalHFA’s ADU grant program that gives homeowners up to $40,000 for ADU pre-construction costs. This program is being constantly updated to make it easier for everyone to build an ADU of their own.

Talk with an ADU professional in your area to learn more about the grants and loans available to you.


Typical ADU Loans

Even with a grant, you will still likely need a loan of some sort. Here are some of the most popular loans individuals use to build an ADU.

  • Home equity loans and HELOCs
  • Cash-out refinancing
  • A personal line of credit
  • Construction loan
  • Renovation loan
  • Chattel loan

Changes in Freddie Mac regulations now make it easier for you to qualify for these loans, so there is a good chance you will get one.


Other ADU Financing Options

You can also consider using your cash savings to pay for your garage conversion. However, as we talked about earlier, though most people don’t want to use their savings.

You can also consider peer-to-peer lending as a non-traditional lending option. Websites like Point and PeerStreet make it easier for homeowners to sell equity in their homes in exchange for cash for renovation projects.


Start Your Garage Conversion Today

Despite the costs associated with developing a garage conversion, it can be a very rewarding endeavor. You will have more living space to benefit from, that will ultimately add to the value of your home. If you are looking to get started on your garage conversion, consider working with us.

Here at Levi Design Build, we have been helping homeowners developing ADUs for years with a team of experts dedicated to quality over quantity. Our process starts with a free consultation to go over all the necessary milestones needed to complete the project and the costs associated with doing so.

When you work with us, you get a comprehensive system that provides you with a dedicated group of designers, permit expediters, and builders. Contact us today to get started on the garage conversion of your dreams!