How much equity can be gained by finishing an upper level or lower level or building a garage were one currently doesn’t exist? I have been looking at a few minor rehab projects and time after time I find homes were this is a option.
I think the answer to your question is how much will it cost YOU to do the work. If you are a contractor and on slow days you have a crew go to a property and work on an upstairs finish, your cost and hence your profit should be greater. You may also have a contractor you do tons of work with. If he can get in and out for a great price you can win there too. Do some comps on the sq. ft. living space your adding and I think you’ll have your answer. Garages,are another matter,very market related.
In some markets houses are slow to sell without a garage. In low cost areas it probably isn’t going to make a signifcant differance. remember Garages involve excavation and concrete foundations which can get VERY expensive, finishing an upstairs is a lot easier.
Any appraiser and and good Realtor should be able to tell you the estimated value of any improvement of a property in a given market.
From there, it’s value of improvement - expense = added FMV
Generally speaking, upper level square footage is not as valuable as ground level, and basement level square footage is the least valuable of all finished square footage. Unheated square feet is the lowest value of all. But again, that’s general. Some markets, those things are in demand and command a premium.
Examples: In my market, general value of an added upper level (such as a finished attic) is about $50/square foot. Finished basement = $25/square foot.
Unfinished areas normally come in around $15/square though garages are generally appraised based on number of car spots and are about $5K a spot (2 car garage = $10K)
Other things that come into play when figuring value is the surrounding area and the market class of the home (lower, middle, upper class).
Raj
I agree with Roger. Remember that appraised value, especially garages, can be lower than your cost. If a garage is valued at $5000 per space as Roger uses as an example, it would be very hard for you to build that space and make a profit. Between the excavation, foundation, lumber, roofing, electrical, and garage doors
your cost is more likely to be double that.(in that market)
Beware of building codes. My friend is putting a dormer on the entire front of his in order for the attic to make a minimum height for atleast half of the attic space. Quite sure this only applies towards making and referring to it as living quarters, like a bedroom, but check your local code. Another thing that was brought up was the extra steep stairs going to the attic, may need to adjust slope to consider the attic living quarters. I’ll know more in the next week how it plays out.