Garage Conversion Guide: Costs, Process, and What to Know

Your garage is 400+ square feet of underused real estate. Most people fill it with junk and park in the driveway anyway.

Converting it to living space—rental unit, home office, guest suite—can add value and function. But it's not as simple as throwing up some drywall.

Here's the complete guide to garage conversions.

Types of Garage Conversions

ADU Conversion (Full Living Unit)

Complete separate dwelling with kitchen, bathroom, sleeping area, entrance.

• Cost: $50,000-150,000
• Permits: Always required
• Rental potential: Full rental unit

Living Space (Non-ADU)

Additional room that's part of main house—not a separate unit.

• Cost: $20,000-80,000
• Permits: Usually required
• Use: Bedroom, family room, home office

Partial Conversion

Convert part of garage, keep some storage/parking.

• Cost: $15,000-50,000
• Permits: Depends on scope
• Use: Home gym, office, studio

Garage Conversion Costs (Detailed)

Full ADU Conversion: $50,000-150,000

Living Space (No Kitchen): $20,000-80,000

Remove kitchen costs (-$10-30K) but keep everything else for a bonus room with bathroom.

Basic Conversion (No Plumbing): $15,000-40,000

Home office or bonus room without bathroom:

• Insulation, drywall, flooring
• Electrical upgrades
• HVAC
• Exterior wall where door was

The Conversion Process

Step 1: Check Zoning (Week 1)

Before anything else:

• Can you convert garage to living space? (Most areas: yes)
• Can you convert to ADU? (Varies significantly)
• Are there parking requirements?
• Setback issues?

California: State law generally allows garage-to-ADU conversions

Step 2: Design (Weeks 2-6)

Decisions to make:

• Full ADU or living space?
• Keep garage door or replace with wall/windows?
• Floor plan and layout
• Bathroom and kitchen locations
• Entry door placement

Consider hiring an architect for ADU conversions—money well spent on efficient layouts.

Step 3: Permits (Weeks 4-12)

You'll need permits for:

• Change of use (garage to habitable space)
• Electrical work
• Plumbing (if adding)
• HVAC
• Structural changes

Permit timeline varies: 2-12 weeks depending on jurisdiction.

Step 4: Construction (Weeks 8-20)

Phase 1: Structural (Week 1-3)

• Reinforce foundation/floor if needed
• Frame new walls (where garage door was)
• Structural upgrades for ceiling/roof

Phase 2: Rough Systems (Week 3-6)

• Electrical rough-in
• Plumbing rough-in
• HVAC ductwork
• Inspections

Phase 3: Insulation & Drywall (Week 6-8)

• Insulation (walls, ceiling, floor)
• Drywall installation
• Tape, mud, texture

Phase 4: Finishes (Week 8-12)

• Kitchen cabinets and counters
• Bathroom fixtures
• Flooring
• Paint
• Trim
• Fixtures and appliances

Phase 5: Final (Week 12-14)

• Final electrical/plumbing
• Final inspection
• Certificate of occupancy

Total Timeline: 3-6 months

Key Technical Challenges

1. Floor Height

Garage floors are typically 4-8 inches below house floor level and sloped for drainage.

Solutions:

• Build up subfloor (reduces ceiling height)
• Self-leveling concrete
• Accept the step down (works for detached ADU feel)

2. Ceiling Height

Minimum ceiling height: 7 feet for habitable rooms (varies by code).

Problem: Some garages have 8-foot ceilings, leaving little room after raising floor.

Solutions:

• Raise roof (expensive: $10,000-30,000)
• Expose rafters/trusses if structurally possible
• Build floor as thin as possible

3. Insulation

Garages typically have zero insulation.

Requirements:

• Wall insulation (R-13 to R-21)
• Ceiling insulation (R-30 to R-49)
• Floor insulation (if over crawl space)

4. Electrical

Garages usually have minimal electrical—one circuit, a few outlets.

ADU needs:

• 100-amp subpanel (or share with house)
• Kitchen circuits (2x 20-amp for countertop, separate for fridge, dishwasher, etc.)
• Bathroom circuits (GFCI)
• General lighting and outlets
• HVAC circuit

5. Plumbing

This is the expensive part. Running new plumbing:

• Drain lines need proper slope
• May require breaking concrete for sewer tie-in
• Water supply from house main
• Hot water (tankless heater or tie to house)

Location tip: Put bathroom and kitchen on the same wall to minimize plumbing runs.

6. HVAC

Options:

• Mini-split: $3,000-5,000 installed. Best for separate unit.
• Extend house HVAC: $2,000-8,000. May require upsizing system.
• Baseboard/wall heater + window AC: Cheapest but least efficient.

7. The Garage Door Question

Option A: Remove entirely, build wall

• Looks most finished
• Best insulation
• No evidence it was a garage
• Cost: $3,000-10,000

Option B: Replace with windows/French doors

• Keeps exterior character
• Lots of light
• Clear this was a garage
• Cost: $3,000-12,000

Option C: Keep garage door (rare)

• Usually only for workshops
• Terrible insulation
• Generally not allowed for habitable space

Parking Considerations

Losing your garage means losing parking. Check:

• Local requirements: Some areas require off-street parking per unit
• Practical reality: Where will you park?
• California: Recent laws eliminated parking requirements for most ADU conversions

Solutions:

• Driveway parking
• Street parking (if allowed)
• Adding carport elsewhere on lot

Is a Garage Conversion Worth It?

The Math

Conversion cost: $100,000 (mid-range ADU) Monthly rent: $1,500 Annual rent: $18,000

Payback period: 5.5 years (before expenses, taxes, financing)

With HELOC financing at 8%:

• Interest: $667/month
• Net income: $833/month
• Payback: 10+ years

Better than new ADU:

• New detached ADU: $250,000+
• Garage conversion: $100,000
• Same rent: $1,500
• Much better returns

Value Added to Home

Garage conversions add value, but not dollar-for-dollar:

• ADU conversion: Adds 50-80% of cost to home value
• Why not 100%? Some buyers want a garage

Best scenario: High-rent market where ADU income justifies premium pricing.

Non-Rental Value

• Home office: Worth $500+/month in saved rent
• Multigenerational housing: Priceless for family situations
• Aging in place: Ground-level, accessible for future needs

Common Mistakes to Avoid

1. Skipping Permits

Unpermitted conversions:

• Create problems when selling
• May void insurance coverage
• Can require tear-out if discovered

Just get the permits. It's not that bad.

2. Ignoring Ceiling Height

Measure before committing. If your garage has 8-foot ceilings and you need to raise the floor 6 inches, you're at 7'6"—barely legal for habitable space.

3. Cheaping Out on Insulation

Garages are cold (or hot). Proper insulation is essential for comfortable, energy-efficient space.

4. Poor Kitchen/Bath Layout

These are expensive. Plan carefully:

• Plumbing on shared wall
• Efficient kitchen layout
• Bathroom venting to exterior

5. Not Considering Entry

ADUs need separate entry. Make sure:

• Entry is accessible from outside
• Path doesn't require entering main house
• Mailbox/address situation is clear

Financing a Garage Conversion

HELOC (Recommended)

• Draw as needed during construction
• Interest-only payments during build
• Flexible for project changes
• Get a HELOC quote

Home Equity Loan

• Lump sum upfront
• Fixed rate
• Good if you know exact costs

Personal Loan

• Faster to get
• Higher rates
• No home as collateral

Construction Loan

• Overkill for garage conversion
• Better for new construction ADU

Bottom Line

Garage conversions are the most cost-effective way to add living space to your property.

Best candidates:

• Detached garages (easier to make feel like separate unit)
• Garages with 9+ foot ceilings
• Properties where parking isn't critical
• Markets with strong rental demand

Think twice if:

• You actually need the garage
• Ceiling height is marginal
• Zoning doesn't allow ADU (limited use case)

The $50K-150K investment can generate real rental income or solve real housing problems—at a fraction of new construction cost.

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Ready to convert your garage? Check your HELOC options to understand your financing capacity.