First of all... are you allowed to have a home office in that space? Some areas would not allow that, mine being one of them.

I would think calling it a bedroom - no1 would even think 2x to ask.

You wouldn't be able to do that in my area either. They don't want any possibility of a rental structure in a single family neighborhood. The neighbors want to maintain property values, so you bet one of them would complain to the city if a project like that was attempted without permits

The biggest obstacles is that you're talking about actually building a house here, not a "garage". And it's going to cost like building a house, not a garage. Tearing down the structure entirely and starting over will be cheaper probably than just tearing the roof off. It lets you address the deficiencies in the framing of the original structure and insulation levels. And it lets you deal with planning for a staircase, which eats up a ton of room, and cannot be inside a garage without a fire door at the top to the habitable space.

Adding the bath will be the most costly element. A lot will depend on where your utilities enter the property, and where the sewer exits. You've got a lot of excavating in your future to do that correctly. And there's no point in trying to create a "bedroom" without a bath.

Your first step is to visit your codes office and find out their requirements for doing this. Then you can think about the specifics.

But, it won't be cheap. Whatever new construction costs in your location, it will cost that. Or more, since you're having to work around an existing structure and access is limited and more difficult.

First you have the permitting issues ... What does your location allow you to do there?

If it's a garage, it's probably not framed to support a 2nd story, so that would have to be fixed, and fixing is more expensive than doing it right from the start.

There are extremely tight safety regs for anything over a garage, because of the fire and CO problems.

re: Permitting - Fortunately, there are a few houses next to us that have detached garage rooms so that will be a non-issue.

Structurally - since I am able to get to the roof area storage on some plywood they set over the trusses & joists but it's the height that I am worried they will have to tear the room off & reframe it higher.

Thanks every1 for giving some things to think about & discuss with architect & eventual builder.

pbx2 - You need to make sure that the framing for the walls on the first floor are strong enough to hold up the new second floor, it's finished surfaces, AND its contents. And the ceiling joists, too, have to be sized to hold up a 2nd story, not just an bit of plywood.

If they aren't - if they don't meet the standard - you have to beef them up.

My BIL used to jack up a lot of small houses and build a stronger 1st story in order to add a floor.

Stairs! I wouldn't even put money into the space, without adding indoor stairs. But, that might be because we have lots of snow in winter and I don't like climbing ladders :)

I have thought about utilizing attic space as you want to for more than storage but the bottom line there are too many things to get it into compliance with code. It would be cheaper to build an addition that ties into the house. If it it framed with trusses then it is even harder. You have to think that a floor above has to support live load according to code and span a minimum of 20ft unless you want to put a beam and post in the center which I doubt you want to. You would need to install 11 7/8 I-joists to make this span and even then the load ratings will probably not work if something like a bathtub is part of the dead load.

If the garage would have been built with living space planned for in the beginning you would be in much better shape. If you already have an attached garage than you could always convert the garage into living space or find a location if space allows to build an addition....this is usually more efficient b/c you will likely only have 3 exterior walls which is easier to heat/cool and you can probably utilize an existing bathroom.

I don't see a problem as long as framing will allow it.
but from a heating & cooling perspective these areas
can be difficult to heat/cool.
there are many threads about family rooms over garage
(frog) with people complaining about the difficulty to
condition these areas.
problems are...heat gain from being so close to roof,
heat gain from walls of room shared with attic space,
air movement through walls, over and under the room.
air sealing & insulating is key to making these spaces
comfortable.
these rooms are surrounded by extreme attic temps.
so additoinal care is needed to deal with this gain.
either taking the time to insulate then use
foam sheathing boards to air seal...or foam.
while spray foam costs are high...labor to air seal with
foam sheathing boards quickly adds to material costs of
this detail orientated install. foam sheathing, tape for seams, button cap nails to install & caulk to air seal.

I'd look into costs of foam..spray foam the roof line &
the west facing wall. since the garage is detached...
minisplit is most costly. but a heat pump minsplit would
be very nice. less costly would be heat pump p-tac..
noisy & hole into wall would need to be cut.
least expensive would be window unit with heat pump...
not a/c with electric strip...very expensve to operate in
winter...not much cheaper in summer.

will plumbing be added for bath or mini kitchen area?
plumbing is expensive, but if you are going to do it..
make a full bath.

and of course...pick windows with low e coatings &
inert gas if on west side.