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Transforming Your Garage into a Profitable Living Space

Garage Conversion ADUs offer a profitable way to maximize space, house loved ones, and generate rental income. Learn about eligibility, costs, requirements, and the benefits of converting your garage.

Updated May 22, 2023

If you’re looking to expand your home, an ADU is a great addition. Not only does it create space for you to house and host your loved ones, but it can be rented out for a bit of extra income and boost property value in the long run.

Of the different types of ADUs available to California homeowners, conversion ADUs can be cost-effective because they make use of what you already have. Garage Conversion ADUs in particular are a win-win if you want to make use of an underutilized area and also profit off this newfound livable space.

Keep reading to understand whether you are eligible to repurpose your garage, the different ways to go about doing so, the costs involved, the requirements for your garage type, and the benefits of converting your garage.

What is a Garage Conversion ADU?

As the name suggests, garage conversion ADUs are the refurbishment of pre-existing garages into livable areas. Garages qualify as a type of accessory structure, like basements and attics, that qualify for conversion.

It's important to remember that not all garages are eligible to be converted into ADUs; there are some zoning, permitting, and structural requirements that may have a bearing on conversion.

Garage Conversion ADUs vs. Detached/Attached ADU: What’s the difference?

Though one isn’t inherently better than the other, there are a few notable differences between conversion projects and new structures:

1. Garage conversions can cost less

Assuming your structure is good to go as is, garage conversion projects can save you money on foundations, roofing, and other aspects of construction. Since construction makes up roughly 90% of the cost of your project, these savings can be rather significant! Importantly, the condition of your garage can affect costs; older or structurally unsound garages can sometimes require rehabilitation work to make them into modern, livable spaces.

2. Garage conversions save time

Permitting an ADU can take months, but timelines for garage conversions are sometimes shorter than those for new attached and detached structures. They are also often quicker to build, so you can set up your new ADU in a shorter period of time! A 600 sq. ft. one-bedroom ADU in California can yield between $2,500 and $3,000 in monthly income, so if this seems worth it to you, then you should start assessing the possibilities and limitations of your existing structure.

How do you know if your garage is eligible for conversion?

There are a few things you need to clear up before starting your conversion project:

1. Is your garage permitted?

It’s common to find illegal or unpermitted structures in your garage, especially in older buildings. As long as this work doesn’t pose any health or safety risks, you may go ahead with converting your garage into an ADU. It should also comply with Building and Fire Codes; this might be an issue with decades-old garages.

2. Is your garage structurally sound?

Before you attempt to refurbish your garage, you must make sure that your foundation, framing, roofing, and other structural elements are stable and aren’t sagging or uneven. You may also need to obtain a geotechnical soil report before you begin.

Make sure to have a qualified contractor assess your garage to determine whether it is usable. In some instances, you may be better off demolishing your garage and building your ADU from scratch instead of working with an existing structure.

3. Does your garage have water damage?

Garages can smell musty, and this is often a result of water intrusion. Usually, this intrusion is due to a leaky roof and, if the issue has persisted for a while, may require roof repair. Water damage may also impact the foundation and framing.

4. Is your garage large enough?

Since the minimum size requirement for ADUs in California is 150 sq. ft., converting a small space (one-car garage) is possible. As ADUs must be fully equipped for independent living, a one-car garage may be a very intimate space!

A two-car garage measuring 18 ft. by 20 ft. (approximately 360 sq. ft.) is a more popular place to start.

5. Does your garage have a utility hook-up?

Your structure must be able to be connected to electricity, water, and sewage lines. In addition to having an HVAC system, it must also be well insulated.

6. Are you encroaching on a utility easement?

Utility easements are areas made accessible to utility workers for the maintenance of overhead or underground power lines, transformers, and other facilities.

To build on these typically “off-limits” areas, you’d need to request an encroachment permit, which might add time to your timeline.

Once you’ve cleared all of these things up, here are some ways to go about converting your garage.

What are the different types of garage ADUs?

There are a few different ways to structure a garage conversion ADU:

- Detached garage ADU

Detached ADUs stand separate from your main residence, can be built in the backyard, and offer more privacy to residents. They are a good way to maintain privacy between the inhabitants of the ADU and the main home (either renters or relatives).

- Attached garage ADU

Attached ADUs are contained within the main residence but cater to independent living just as detached ADUs are.

- Junior garage ADU

Junior ADUs (JADUs) are essentially just smaller ADUs and are a great solution if your garage is on the smaller side.

Attached garages are allowed to be converted into ADUs and JADUs without teardowns or rebuilds. Detached garages may be torn down or rebuilt entirely, but they aren’t allowed to be converted to JADUs.

Depending on the type of structure you are building, the specific requirements for your garage conversion may differ. Let’s take a look at that next.

What are the requirements for converting a garage into an ADU?

The requirements for converting a garage into an ADU depend on a number of factors and vary based on how your property is zoned.

Here’s a quick breakdown of common requirements for single-family residences:

Sizing

When converting an attached garage into an ADU, it must be the same size as the original structure
The same applies to detached garages, but they are allowed an extra 150 sq. ft. to accommodate entrances and exits
Attached garage ADUs are usually allowed to be up to half of the size of the primary residence and detached ones may go up to 1,000 sq. ft., or 1,200 sq. ft. in some cities
In California, state regulations currently do not specify an upper size limit for converting detached structures to ADU, which means you can potentially even convert a large detached garage if you demolish and build on top of its footprint
JADUs built out of attached garages may be up to 500 sq. ft.

Access

All ADUs must have an exterior entrance that is separate from the primary residence, but attached garage ADUs may have an interior connecting entrance as well

Sanitation

ADUs must be equipped with their own bathroom, but attached garage JADUs may share a bathroom with the primary residence

Footprints

You may build a detached garage ADU on the footprint of a demolished garage if you match its dimensions

Parking

ADUs converted from attached and detached garages usually don’t require replacement parking, but JADUs may

Setbacks

If the footprint of your garage isn’t being changed, then you don’t need to meet any additional setback requirements for the side and rear property lines
If you are adding floor area to the garage, you cannot exceed rear and side setbacks by more than 4 ft.

Fire safety

If your primary residence doesn’t have fire sprinklers, your ADU usually won’t require them either but this may vary based on local fire access requirements
Based on the distance of your detached garage ADU to other structures, you may be required to install fire-rated walls

Owner occupancy

If your ADU is permitted before the end of 2024, owner occupancy may not be required but after this period, this requirement may vary depending on the jurisdiction
JADU owners are required to live in either the JADU or the main residence

How can you bring your garage up to code for a conversion ADU?

Since you’re converting a utility structure into a habitable dwelling, you may need to make a few tweaks to your garage so it's up to code. Here are a few upgrades you can make:

Fix up plumbing, heating, and other utilities
Add in supportive ceiling joints for insulation and drywall
Add in a retrofit moisture barrier in between the slab and the flooring
Fix up exterior finishes if the garage is within 5 ft. of the property line

Most of these requirements also apply to multi-family residences, but there are a few other things to keep in mind:

Conversion ADUs that are entirely within the main multi-family property take on those same requirements.
The number of conversion ADUs you are allowed to have is 25% of the number of existing units already on the multi-family property.

All things considered, not all garages check all the boxes, in which case you may be better off demolishing your garage and building your ADU from scratch.

How much can you earn from garage conversion ADUs?

ADUs are a great way to boost the value of your property. This, paired with the many rental opportunities, means a good return on your investment; while rent can vary by location, one-bedroom ADUs can bring in upwards of $1,300 in monthly income.

If you ever plan to sell your home, you’d have to sell your ADU along with it; neither structure can be sold separately. With that in mind, you’d need expert help to make sure everything is in check and your ADU is well-built to take full advantage of future resale values.

Depending on the size of your ADU and the location of your property, you may be able to earn a strong ROI on the cost of your project, so it's definitely a worthwhile investment.

How much does it cost to build garage ADUs?

The cost of building any ADU depends on the location of your property, the construction cost per square foot, the complexity of your project, and a number of other factors:

Older garages can be more expensive to convert because they need more work to bring them up to par with today’s code
Utility costs for your ADU (gas, electricity, waste, and water) can be important to consider

Construction makes up 90% of the final cost of your project, and the cost per square foot can often vary between $300 and $500, depending on where in California you are building. This number may be lower for conversion projects.

Let’s assume you are converting a 400 sq. ft. garage into an ADU at a cost per square foot of $400. Your construction cost would then be $160,000.

Permitting and other administrative fees cost a few thousand dollars, and once you factor in everything, you’re looking at a couple hundred thousand dollars for the whole project.

How long does it take to convert a garage into an ADU?

Depending on the state of your garage and the complexity of your project, your garage conversion may take between 7-9 months to complete. The better the condition of your existing structure, the less work will be required to bring it up to a usable state.

Is it cheaper to tear down a garage and build an ADU from scratch or convert an existing garage?

If your garage is a few decades old, then it’s probably not the best candidate for conversion, given that it may no longer be up to code. Outdated materials and weakened structures can affect the integrity of your build and incur extra costs to fix, so you’re better off tearing down the garage and building anew.

Though it might sound like a big overhaul, demolishing your garage shouldn’t add more than a few weeks to your project timeline. However, it is worth noting that this is dependent on the exact conditions of your garage and the specifications of the ADU you’re trying to build.

Can you build an ADU above a garage?

Let’s say you have a storage room above your garage that’s just gathering dust and not seeing much use. You can sometimes turn this underutilized area into a self-contained ADU.

Above-garage conversions are a great way to increase living space and create functional rooms away from the noise with minimal construction.

Alternatively, you could also add an entire second story above your garage, but this may require additional structural support, stairs, utility connections, and a new roof, among other features that would facilitate this new addition.

Note that you may need a demolition permit and other improvements to bring your structure up to code, and this can add more time to the length of your project.

Depending on how much square footage you have to work with, you might want to make your space appear larger. Here are some ways you can do that:

Bring in as much natural light as possible with large windows and paneling
Use white and other colors that reflect light to brighten up your space
Free up space by using built-in cabinetry and convertible furniture

Aesthetics aside, the feasibility of an above-garage (or second-story) ADU depends on the residential height restrictions in your jurisdiction, among other factors. That’s why it's important to work with an expert who is well-versed in zoning and building regulations and how they might impact your project.

What are the benefits of above-garage ADUs?

Aside from the addition of livable space, above-garage ADUs come with their own unique perks:

If well-insulated, above-garage ADUs can be very quiet spaces
Above-garage ADUs are generally on the smaller side so are cozier and perfect for short stays
They are a cost-effective alternative to independent and private living and can also be rented out for an additional source of income

How much does it cost to build above-garage ADUs?

Building a second story can require adding structural support to your entire exterior and foundations to make sure it can manage the weight of the above-garage ADU.

All things considered, you could be looking at roughly $200,000-$300,000 to build an ADU above a garage. However, this depends on the complexity of your project and the amount of work needed to bring your structure up to code.

Is a garage conversion ADU right for you?

If you’re stuck for space and are in need of a quick housing solution, a garage conversion ADU might be right for you, especially if your garage isn’t seeing much use.

Conversion projects are a great way to maximize the space you do have and improve your property’s rental value.

How can Cottage help with garage-to-ADU conversion?

Over the years, we’ve had the opportunity to breathe new life into several spaces. Here are a few garage conversion projects we’ve made possible:

French door garage conversion

1 bedroom, 1 bathroom
Floor area: 535 sq.ft.

Oakland detached ADU

1 bedroom, 1 bathroom
Floor area: 354 sq.ft.

Modern garage conversion ADU

1 bedroom, 1 bathroom
Floor area: 697 sq.ft.

At Cottage, we take a stick-built approach to ADU design and are committed to delivering a customized, budget-optimized ADU that fits your vision and property needs. Reach out to us to work with our trusted network of contractors and ADU experts, and get started on building your ADU today!

FAQs

How much is a permit to build an ADU in California?

The cost of getting a permit to build an ADU in California can range from around $1,800 to $9,000 and up and is a fraction of your projected construction costs. As such, the cost of a building permit is affected by the type, size, location, and scope of your ADU project.

Can I convert my detached garage into a guest house?

Yes! There is a legal loophole that allows you to demolish and rebuild over the same footprint as the original structure. Permissibility varies across jurisdictions, so do check on this with your contractor.

What is the return on investment for a garage conversion?

Adding livable space to a home boosts its value, and if done well, it’s possible to earn up to 80% ROI on your project, depending on construction costs and the increase in property value.

Do I need a permit to convert my garage in California?

Permitting is the first step to building an ADU, and permits are required for most types of construction in California. For garage conversions, you’d need to get local permits for the new use of the structure, as you’d no longer be using it as a garage. This would involve having your plans approved by the local jurisdiction, bringing your garage up to Building and Fire Codes, and having it approved by a local inspector.

How do I legalize an unpermitted ADU in California?

Many local governments have unit legalization programs to legalize ADUs. Such ordinances allow legalization as long as all safety regulations are met. Once legalized, these ADUs can be put on the housing market.