'converting' garage to a room - valuation

Hi,

I saw a townhouse which had it's internal access garage converted into a bedroom. Basically a stud wall had been placed behind the garage door. To all intents the room looked like a bedroom with a window.

My question is that does such a conversion (3 bed to 4 bed) increase a bank's valuation on the property and also expected rental income as per the calculator that they use?
 
Hi,

I saw a townhouse which had it's internal access garage converted into a bedroom. Basically a stud wall had been placed behind the garage door. To all intents the room looked like a bedroom with a window.

My question is that does such a conversion (3 bed to 4 bed) increase a bank's valuation on the property and also expected rental income as per the calculator that they use?

Interesting question! I have a property like that. A proper 4 bedroom house with the same roof size sold at the same time i purchased my IP for $50,000 more. I advertise it as a 3 bedroom. The living areas are massive so I rent it for as much as a 4 bed would rent for. I'm not sure how you would be treated for insurance purposes if anything tragic happened; fire, etc. I'd prefer to advertise it as an office or study if anything! I found it handy to store office stuff and excess clutter! A previous tenant used it as a hobby/craft room.
 
Bump!

Any thoughts on how the bank would do a rental appraisal? I heard they use their own calculator which spits out a number.

So if I tell them that I will be letting an after garage-to-bedroom conversion (4 bed home instead of 3), will that bump up the rent that the bank believes the property will generate? Or do they just go by address?

OR is it better to rent it out first so that they go by the tenancy agreement?

I'm looking to boost my borrowing power for the next property.
 
We're about to go down the conversion path with the attached garage with internal access in one of our IPs. I'm telling the builders who'll be quoting on the conversion that I want the room made Council legal as a 4th bedroom so factor in DA for rezoning the room from Class 10 to 1a or whatever the process is so that there can be no issues in the future with insurance or otherwise. I also figure doing it properly with the Council will result in real equity since the property could then be leased, sold or whatever as a true 4 bedroom house. No idea on cost yet but I'm very interested to see what the quotes come in at.

Structurally I believe we just need a window cut in one of the brick walls and I want a stud wall installed around 1 metre in from the roller door to create a store room behind the roller door, more so to save on having to remove and brick up the roller door. Ceiling height is just over 2.4m so that shouldn't pose an issue. Don't need a sparky as power points, the light and light switch are all where they should be. The rest of the internal walls are already plastered complete with cornices so no effort required there either. Fingers crossed I haven't missed anything nasty and that it turns out to be straight forward for both the builder and the Council.
 
I would be careful with this. Some bank valuer would do their diligent and call council to see if there is any approval for this kind of work. If found unapproved, valuers may not give any value to it. I have had experience even where a bank valuer had difficulties in ascertain the approval of an extension from council, and therefore deemed the extension of little value.. On a worst case scenario, they may not given value to the 'extra' unapproved room , but may also devalue the overall property because there is 1 less garage.

A garage or out building is inhabitable, meaning you can't put a simple stud wall and flooring. It needs to comply to basix which requires insulation, min height, lighting etc. It might raise concerns with council to perform further inspection on the matter.
 
Structurally I believe we just need a window cut in one of the brick walls and I want a stud wall installed around 1 metre in from the roller door to create a store room behind the roller door, more so to save on having to remove and brick up the roller door. Ceiling height is just over 2.4m so that shouldn't pose an issue. Don't need a sparky as power points, the light and light switch are all where they should be. The rest of the internal walls are already plastered complete with cornices so no effort required there either. Fingers crossed I haven't missed anything nasty and that it turns out to be straight forward for both the builder and the Council.

putting a stud wall behind a roller door...you may also consider the option removing the garage roller door (unless you want to convert back to garage at later date) and put a large sliding glass door.
the stud wall would cost about 2k, a sliding door might cost 3k.
don't forget the roller door needs about 500mm clearance plus the stud wall, would easily reduce overall 3-5m2 floor space.
 
I would be careful with this. Some bank valuer would do their diligent and call council to see if there is any approval for this kind of work. If found unapproved, valuers may not give any value to it. I have had experience even where a bank valuer had difficulties in ascertain the approval of an extension from council, and therefore deemed the extension of little value.. On a worst case scenario, they may not given value to the 'extra' unapproved room , but may also devalue the overall property because there is 1 less garage.

A garage or out building is inhabitable, meaning you can't put a simple stud wall and flooring. It needs to comply to basix which requires insulation, min height, lighting etc. It might raise concerns with council to perform further inspection on the matter.

This is exactly why I want to do this properly with Council approval so that the room can be legally classed as a habitable space and that's why I'm making it clear to any builder who quotes on the work that it has to be done with Council DAs or whatever else they require in order to approve it as habitable. It's not worth it to me to bother with the costs and hassle if the Council will be unable to approve it.
 
The existing garage floor space is 4.65m long x 3.2m wide. Putting a stud wall 1 metre in would still leave around 3.5 x 3.2 for the bedroom. Even if I had to lose another half metre and drop to 3.0 x 3.2 I still think this would be fine. Any smaller would be a different story.

If I left the garage alone I don't think it's particularly practical anyway as 4.65 metres isn't really long enough as you couldn't even park a Commodore in there. The real estate reckons I'd get a much better rent return with the 4th bedroom and sacrificing the garage than retaining it with 3 bedrooms. I can sort out covered car parking by adding to the front patio that spans across the driveway, it's currently 3.5 metres square at that point so if I add another 2 - 2.5 metres onto that along the driveway that'd give me a 5.5 - 6 metre deep carport which is enough to fit most cars. Precedence is set as next door has done exactly this only their carport goes right to the front fence, an extension of 6 metres and I don't need anything like that.
 
If you can get council approval, a useable extra bedroom and maintain adequate parking on site I would say go for it you will get equity and rental improvements. Council approved bca compliant room should get appropriate treatment by a valuer.
 
Back
Top