Whether you’re selling your home soon or you’re looking to add value long-term, the garage may not be the first room you think of when upgrading your home. For many homeowners, the garage is a place to store things and work on projects, so aesthetics take a back seat. However, if you’re looking for a unique way to wow potential buyers, a finished garage is one potential tool in your arsenal. But does a finished garage truly add value when selling your home? The answer depends on what you’re trying to accomplish, and what sort of buyer you intend to attract.
If you are in the market to buy or sell a home, you know the importance of the finishings and furnishings that can turn an apprehensive buyer into a customer signing on the dotted line. Updated rooms such as bathrooms and kitchens, along with new paint jobs and perfect staging can catch eyes and drum up excitement, but did you know that a finished garage can also add resale value to your home?
Everyone expects the other rooms to be up to par, but the added the surprise of a finished garage that functions as a workable space comes to a delightful surprise as they open the door and find out they are getting something more. In fact, according to one of the biggest home manufacturers in Ontario, a finished garage can bring in as much additional monetary benefit as another bedroom inside the house!
The key to creating that bonus space is to make it warm and inviting like a usable space, complete with lighting, finished flooring, weatherproofing, and usable storage. You need to get the wheels started turning in their heads so they leave thinking, “That garage could work well as a rec room, playroom, gym, etc.”
Check out our range of garage renovations here.
What is a “finished garage” exactly?
“Finishing” a garage can mean something different, depending on the style of your home. We’re going to be using a pretty generic definition that will work for the majority of recently built houses.
A finished garage should have the same basic characteristics as the other rooms in the house.
That means that you shouldn’t see any exposed ductwork, electrical components, studs or beams of the house. If you’ve got drywall throughout your house, that needs to continue in the garage. Depending on where you live, you may need to add insulation, heating or air conditioning to the garage. The floor can be tile, epoxy or even exposed concrete, but it should be sealed against leaks and spills.
Lighting and air circulation are also critical. A brightly lit room and a well-placed fan can go a long way to making the room feel more comfortable and inviting.
If your house is a rustic cabin or has an industrial theme, then the beams and ductwork are all part of the vibe. If you make your garage feel as comfortable as the rest of the house, you can say your garage is “finished.”
What does a finished garage do to the home appraisal?
Here’s where the rubber meets the road.
I spoke to a couple of home appraisers in some of the country’s biggest real estate markets to see if they took a finished garage into their home valuations and if it made a difference.
It turns out, it does make a little difference, but not nearly as much as you’d like.
A typical garage renovation can cost several thousand dollars by the time you account for drywall, paint, flooring and garage storage.
The storage cabinets are going to account for a lot of that cost, but they won’t help in the appraisal. A real estate appraisal only looks at things that are part of the house. Most garage storage solutions won’t qualify because you can take it with you when you move.
That leaves the drywall and the flooring. They usually add less than 50% of what you paid for it to the value of the house. In general, you’re talking about an extra grand or so to your home’s value.
Beyond the numbers: adding “curb appeal.”
OK, so a finished garage has little to no impact on your home’s appraisal. However, you may be able to add to your home’s curb appeal. That may be just as good.
What is curb appeal? Curb appeal is anything that will make your home stand out when you compare it to other homes of similar features in your area (we call those ‘comps’).
When I grew up, my mom was a Realtor in Pennsylvania. I heard a lot about staging houses for potential buyers.
She would spend countless hours walking her sellers through all the little details that would give home buyers the best first impression.
If a house had a great first impression, more people would be interested in it. The house sold faster, for closer to the asking price.
What does that have to do with your garage?
People expect a messy, unfinished garage. If you don’t believe me, take a drive through your neighbourhood on a Saturday afternoon. Most people have to park their cars in the driveway because their garages are full of junk.
A clean, organized, finished garage goes a long way to making your home stand out.
What about converting your garage to a gym or an additional bedroom?
This is where it gets tricky. If you want to convert your garage into something other than a home for your car, there’s a lot more involved.
According to Nest.com, a one-car garage can add up to $5000 to the value of your home. It stands to reason that you’d lose at least that amount of money if you decide to renovate your garage into another room.
Many home buyers (myself included) won’t even consider buying a home without a garage.
Any time you’re converting a non-livable space into a livable space, you’ll need permits from your local city government. They want to make sure that the work is being done safely and professionally.
They have to think about your family’s safety, as well as the next owner’s when you decide to sell the house. If your conversion doesn’t meet building codes, you could end up losing a lot of value in your home.
If you decide to convert your garage into a gym or workshop, I recommend converting it so that you can change it back when you’re ready to sell the house. For more permanent renovations (like turning it into an extra bedroom), I recommend leaving this type of garage renovation to the pros.
Hitch Property Constructions has the biggest range of the garage renovations Melbourne. Check it out here.
Finished vs. converted garage: How each impacts your home’s value
Right off the bat, you need to know that converting your garage into additional living space (meaning you’ve taken out the garage door) is never a good idea when you’re planning to sell. A house without a functional garage will decrease in value and make it harder to sell.
“I’ve had a recent experience in a converted garage where it detracted from the value of the house.
“The seller had converted the garage into a large bonus room, but it didn’t have an attached bathroom, and its location within the house was awkward. In order to sell the house, he had to convert it back to a functional garage.”
A finished garage won’t hurt your home’s value, but it probably won’t increase your home value, either.
“Whether or not a finished garage adds value to a house is pretty subjective. Depending on my clientele, one may not care at all, and to another, it means everything.
How much does it cost to finish the garage?
Aside from textured and painted drywall, finished garages also tend to have other bells and whistles, too, like resurfaced flooring and built-in storage.
Once you start adding all of those extras onto the project, finishing your garage will cost you around $9,970 or more, depending on how many extras you add. Ten grand is a whole lot of money to spend on a room primarily used for parking cars.
So, the bottom line is: it’s not worth the money to finish the garage right before you sell.
Most home sellers need a little time and elbow grease spent on cleaning and organizing the garage. The money allocated for finishing the garage is much better off invested in home improvement projects with a high ROI.
That being said, there are some cases where a finished garage is a must-have, say if you’re selling a $1.5 million dollar luxury home, or you live in an area where all of your neighbours have finished garages.
Get professional advice before you make any moves.
A top local real estate agent will be able to tell you for sure if a finished garage will increase a home’s value in your neighbourhood based on their experience with buyer trends and popular home renovations for your area and price point.
For example, if your house already has a finished garage in an area where they aren’t expected or valued, it can still be a valuable asset. A finished garage is also a bonus for buyers that’s worth highlighting in your marketing materials. Extras like that may be the tipping point needed to bring buyers in to see your house instead of your competition.
There is a niche market for finished garages (although it’s pretty microscopic, even for a niche). You might find the rare buyer who will pay more for a finished garage, say a hobbyist who’ll use it as a workshop, or a gearhead mechanic who’ll want a polished place for his classic cars.
On the other hand, a local real estate pro might tell you don’t bother, and then you’ve saved several thousand dollars.
How a Finished Garage Impacts Appraisal Value
If your only goal is to increase the home’s appraisal value, then a finished garage may not offer the best bang for your buck compared to other renovations. While that may sound ominous, it only tells part of the story. A finished garage may not add much to the appraisal value outright, but it can still be an important factor in convincing a buyer that your home is the right choice for their needs.
The “Wow Factor” of a Finished Garage
While a finished garage may not add to the home’s appraisal value, it can certainly be a factor in convincing a buyer that the home is right for them. It can make your home stand out from the pack and holds major appeal for potential buyers who love home improvement projects. This is ultimately where the value comes in finishing your garage, but since it’s subjective, it only adds value for the right buyer.
Considering the Cost of a Finished Garage
Finishing the garage isn’t cheap, but it won’t set you back as renovation projects in some other rooms. The typical cost for finishing a garage checks in around $10,000, so the upfront cost is significant. Whether the investment is worth it is in the eye of the beholder – and the buyer.
Why Finishing Is Better Than Converting
If you plan to update your garage, it’s better to finish it than to convert it completely by removing the garage door. A converted garage is ultimately just another room, while a finished garage still retains the typical garage’s character and utility.
A Middle Ground for Your Garage
If you want to make your garage more impressive without finishing it when selling your home, there’s a middle ground. By cleaning your garage thoroughly, organizing it neatly, and fixing any glaring maintenance issues, you can give your garage a fresh, appealing look without the investment that would be required to finish the room.
While finishing your garage may not add resale value in a concrete way, it can be an important subjective factor in attracting the right buyer. Not every buyer will be interested in a finished garage, but the right buyer may love it. Your real estate agent can help you decide whether to finish the garage, or whether you’re better off investing those funds in another room.
How a Finished Garage Can Increase Your Home’s Resale Value
Cover the Concrete
One update that will pay dividends is flooring. Cover up that drab and uncomfortable concrete flooring with a surface that lends itself to the type of space you are trying to create. For those who don’t plan on bringing cars inside, your options are similar to the rest of your home: laminates, wood, tiles, even carpeting! But for those who wish to keep their flooring durable and vehicle-friendly, it’s best to invest in a coating such as Rhino Floortex Coating. It covers the cracked and dusty concrete surface with a clean and durable coating pleasing to the eye.
Wrap the Walls
With exposed insulation and wooden beams, your garage hardly seems appropriate for storing golf clubs, let alone housing a big screen TV or guests, should you be creating a living space in it. By changing the walls, you can create a more pleasant environment: select proper insulation, drywall, and wall covering such as paint or paper. The idea of a heated (well-insulated) garage in cold Canadian winters is appealing to many buyers!
One thing many buys are already in the market for is ample storage space. Help check off a few points on their list by installing space-saving storage cabinets, floating shelving, and hooks to help get items organized better than labelled boxes on the floor.
Designate the Space
To help buyers better envision what their garage could be, help create functional and appealing spaces. Select one wall or corner and create a work area. Install a workbench, hang a pegboard for tools, and stage it as a usable space. Many people want a zone for their handyman to complete household or occupational tasks, so take the guesswork out. Don’t forget to add ample ambient lighting as well!
Map out an Entertainment Zone
Much like a workbench, a usable entertainment space will likely catch the eye of the buyer. Stage it with seating (an old couch and table will do the trick), or go all out with a TV, surround sound, and seating for the game! Be creative and make sure it is usable, convertible, and appeals to a mass market.
Looking for Melbourne garage renovations? Look no further. Hitch Property Constructions has you covered.
So does a finished or converted garage affect the value of your home?
Converting your garage (meaning, you are taking out the garage door) to add additional space may seem like a good idea, but removing your garage could make it harder to sell. Some owners have had to convert it back to a functional garage in some cases to sell their home, or else withstand longer times on the market. Finishing a garage certainly won’t hurt a home’s value, but it likely won’t increase the value. It’s subjective, meaning that a finished garage could be exactly what the buyer is looking for, causing your home to stand out among the others for sale, or it could be just a ‘nice to have’ with the buyer focusing on other aspects of the home as the main selling point.