First check the local zoning ordinance to see if your property can be a 2 family use or have an accessory apartment.

My first thought was the same as Macy's.

Is this person older? Stairs could present a problem.

Would you consider moving instead of trying to reconfigure your present locatiion?

We live in a neighborhood, where at least 5 other homes have added on in-law apartments in one way or another. Just on two streets. So I doubt very much that we would have problems getting the permission we would need.

I was also thinking last night, that our property taxes will go up. I looked to see what the neighbors with the inlaw apartments are paying for taxes and it's quite a bit higher. So I am taking that into consideration.

Well, moving? It seems like a really bad time to buy into the market. The predictions are for a sizable drop in house values sooner than later. I would hate to buy a house, just to watch it drop it's value 20%+ right after we bought it. So, If the economy and the housing market were more stable and growing, or had just recently taken a big drop, I would probably be considering it more seriously. I just can't wait for things to settle down to do something.

The person moving in would be a younger healthy person, but it's a good point. It makes it less useful in the future if we have a different situation that would make it hard to have stairs. Not sure what other option I would have. I just hate basement renovations and living spaces, so I wouldn't even consider that.

Just because your neighbors did something, doesn't mean they did it safely or legally.

As for property prices, I find your take quite bizarre. Even if you were right and property values were about to drop dramatically (again!) building on to your existing property would be the exact same risk. You'll spend a lot of money and it won't be worth as much as you spent.

"we've been told that the concrete slab the garage is on could not hold a second floor."

I guess it depends who told you this - a structural engineer or just some guy you know. I assume that since you haven't contacted any contractors, you also haven't contacted engineers or architects.

As for the ultimate economics of the situation, tearing down a perfectly good garage to build a new one with an apartment is a sure fire money loser. You will definitely lose more than 20% of what you spend.

The neighbors did get their permits, I am aware of the details. One of the neighbors is a contractor and went before the zoning board to get the permission he needed. Their taxes have all gone up accordingly as has their assessment. Their additions are quite noticeable from the street in each case.

Yes, it would cost us to add on, but it still would be less of a risk in a house that we've spent 30 years in then in a new house at a higher purchase price and a new mortgage.

Yes, I was told that by an engineer. I did have a contractor 15 years ago do some other work and he was an engineer and it was at that time I asked about the garage.

Guess I'm not following you about losing 20% on tearing down the garage? Would that be the cost of demolition? It is a single car garage and there are already problems with the concrete floor. It also has to have the garage door replaced. It has not been improved in any way and hasn't even got electricity running to it. Does that change things?

Nationwide, a garage addition nets about 70% ROI. That means that for every $100 you spend, you add only $70 to the value of your property and you lose the other $30. That is just building new. That doesn't even count the cost of demolition and the loss of value when you tear down the existing garage. Since this is a popular addition in your neighborhood, you'll probably do better than the national average, but you will still lose money.

Ok, I'm following you. It's like a bath redo or a kitchen redo giving you a pretty good value for your money spent and pretty close to 100% return on investment. So when you say a garage addition, you're not talking about a garage/in law addition right? For whatever reason, in this neighborhood, there are a lot of people needing space for relatives to live with them and the town seems to be very cooperative to allow that. I would think, that a neighborhood where this is the norm, might have a better value to an added 'in law' apt, than in an area where you were the odd duck. Which seems to be what you are saying.

Also, with these type of additions, there is a need that is being met, that goes beyond the value added. In other words, it's more than just an economic consideration. It's not an easy decision to make and I'm trying to make a pros/cons list. I would not look forward to doing the renovation. We did a major kitchen remodel 15 yrs ago and it was very stressful and time consuming. I also have no idea how much it will cost. I don't know any good contractors any more and I'm always worried about finding the right one. We're considering using Angie's List, to get some estimates. That's about the only avenue I can see.

But we have been delaying doing necessary work on the garage, because of indecision about how far to go with it. The garage floor is really a mess and needs to be redone. I was reading the site linked below and it seems to describe our situation to some degree. We did have trouble with our door, the floor is not only cracked but broken up. The walls and roof seem ok at this point, but that's just to my eye. I haven't checked with a level, but they seem solid and straight. It seems like it might be a waste of money to repair the problems with the garage, if it was done wrong to begin with, no? I'm not even sure the floor 'could' be repaired. I read somewhere the suggestion that the building could be lifted and the slab repoured with the correct footings, but that sounds farfetched to me. Maybe I'm wrong. Sounds expensive too. Isn't the garage a liability to value, if it is in disrepair? A home inspection would certainly lead to the conclusion that the garage had been done wrong.

Is it unreasonable to think, our two grown sons, could do the demolition?

If we don't go that direction, we would need to consider selling and would probably need to repair the garage before hand, so spending money just to move. Then we would have to find a home with an already built 'in law' arrangement, that was built to our needs and that isn't an easy thing either.

Here is a link that might be useful: Garage contractor Link

Actually, this IS a good time to buy in many parts of the USA. However it's not a good time to sell, so you could be a little stuck on that end! (In my DS's Chicago neighborhood prices have dropped 40% from five years ago. It's not that bad in some places, and even worse in others. In our town the downtrend is reversing, as it is in the market where we own a vacation rental property.))

I only brought up moving because often people on this forum only consider -- surprise, surprise -- REMODELING. LOL

It sounds to me as though your present garage isn't that great an asset anyway, so rebuilding it with an apartment doesn't seem farfetched. Do you think the apartment will be utilized for a long time by this person, or might YOU use it later? Do you have enough land to build a single-story structure that would be both garage and apartment?

Few 'slabs' will support much weight. Almost every building code requires concrete footings.

OT: Is this the best or only solution for this younger person? I'd be comparing long term costs and outcomes if there are any other options.

I haven't looked at the specific listings in our area long enough to have a feel for how things are doing, but my initial look has shown that in our area, houses are just lingering and lingering on the market and dropping in price repeatedly. It may be that some areas are starting to get a little more stable, but some news reports predicting changes in the economy that will turn that down again, are pretty discouraging. I continue to look at the market and am still really evaluating what I think about it. Glad to hear that things are improving in your area. Improving SOMEwhere! lol

Yes, I suppose by the time someone shows up here, they've already made up their mind to remodel and not move. [g]

Yes, I think we might always welcome a second living arrangement. Will we need to use it for ourselves? I don't think a studio over a single garage will work out for us to use, no. We might be better to find something that would work out better in that regard.

We have the original footprint of the one car garage and not a lot of extra space to expand it. We definitely couldn't add a two car garage. It does sound kind of small when I think about that.

Good point, to compare long term costs of other options.

Thanks! Really appreciate the input very much! :-)

Some other things to consider when adding on to an older structure/property.

Everything is grandfathered in right now. If you start adding on to those systems - sewage, electrical etc you often have to bring the parts you touch up to modern code. Example - you need to follow code for the electrical in the new building, but you need to feed it from your current electrical. That might require a service upgrade or new panel or .... who knows. Anyway, the project probably won't be as self contained as you would hope.

For demo, most everything above ground is something your son's could do. If you have to break up a huge slab of concrete and haul it away, you might want to leave that part to someone with the proper equipment.

Another consideration - is this person staying 1 year, 5 years, or permanently? It might be cheaper to pay their rent at a nearby apartment.

Yes, I realize about the 'grandfathering in' aspect of things. Good to keep in mind.

Renting is an option, but then it has no chance of adding to your value either. It's just money out the window. That is on the options list though.

Thanks, lots to think about.

re: adding to value.

Your addition plan will almost certainly result in a net drop in equity (or cash in your pocket if you are paying in cash.) It will also be "money out the window."

Frankly, you just have to come to grips with that reality. Paying for a place to live for a family member is going to cost you money. Whether you are paying for a new house, or construction costs, or rent, it is going to cost you money and you aren't going to recoup it. No matter which way you slice it, it is going to cost you money to take care of this person. It sounds like you are committed to making this generous gift, so you should probably start viewing it as such - a gift.

Then you can concentrate on

a)what would be the most useful way to make this gift for the recipient? eg do they need to be under your roof for guidance, in your backyard to keep an eye on, or in an apartment to establish independence?
b) how does a) match up with your financial resources and do you need to make compromises there?

Sometimes renting is LESS 'money out the window' -- rent, rather than invest more in property that's dropping in value, for instance.

At one time parents would buy a condo in the town where they were sending a child to college. It was both 'housing' and 'an investment in an appreciating asset'. They could sell it for a profit when the chld graduated. Now you'd only do that if you wanted to be landlord to college kids for a long time. (EEEK!)

BTW, thank you for alerting me to the 'shadow foreclosures' issue. (Further drop in RE values yet to come due to mortgage defaults.) I've started a discussion about that on the "Household Finances" forum, with a lead-in on the "Buying and Selling" forum.

Bill,

I do see what you are saying, I have more equity in my house right now, then I will have after I sink more money into it for renovations. But assuming that the real estate market will sooner or later turn around and the value of homes will begin to increase again, I would expect that my home would be 'valued' higher due to the renovations, so that at some point at the right time, if I sold it, I would receive more money for the home than I would if I had not renovated it. Making it an investment rather than money out the window. If there is something wrong with my reasoning, I'm not sure what.

If it will be money out the window, I guess I would have to start thinking about it differently.

Chisue, I plan on getting over to the Buying and Selling forum soon.

Yes, for now property is dropping in value, so it is a lousy time to have to do either....renovate or move....because who knows where home prices will end up. But to pay for rent for someone....in our area, it is costing $800. a month for a 1 bedroom apartment. That's $9600. a year. Almost $20,000. for 2 years of paying for rent.

I must have some mental block, that I still can't see how spending $20,000 to pay off someone else's mortgage is better than renovating our own home. I mean I haven't gotten one estimate for how much it would cost to renovate yet, but I plan on it. I assume it will be at least triple the cost of renting for two years.

Sorry if I am being thick headed. [g] What am I missing?

We have been considering this over the last year, contemplating the time when my mother can no longer live on her own. Our current home doesn't lend itself well to an addition, but we have acreage and could build a separate structure. This would likely be more expensive in part than your plan (running new electric, plumbing, possible separate septic). But could also could be less expensive in part (no cans of worms opened up requiring updates to the main structure, no need to tie in to an existing structure with custom work, an off-the-rack "kit" cottage would require little custom work). While the cottage is still a possibility, we found that it would probably be more cost-effective in our area to sell this property and buy another one that already had the in-law suite in place.

But if you're committed to staying, what is the time frame for this person living with you? Is it a young person who will stay there through college and then leave? If so, what is your plan for future use of the space? Are you comfortable having a renter above your attached garage? Or do you plan for one of your own kids to move into it when a teenager? Will you or your spouse use it as an office?

Because the earlier posters were on to something with suggesting you pay the rent for this person rather than spend $60-100K on adding an apartment to your house. When viewed in isolation, $20K of rent does seem like a waste of money. But compare a known "loss" of $20K with your projected added value to your home, at a known cost of $60-100K. Are you planning on selling the home and then realizing the value of that addition? If not, and you're planning to stay put, then all you have is an intellectualized "gain" that cost you $60-100K to get. I would see what homes in your area have sold for -- with and without the in-law suites. See if they really added value. Because if they didn't, what you're really comparing is spending $20K or spending $60-100K, which is a much cleaner comparison to make.

PrairieMoon, you might want to call a contractor/builder and explain what you are thinking of doing. They can give you a ball-park estimate for what you want to do as well as some of the invisible costs associated with the project. Personally, if you can do some of the work yourselves to keep the cost in check, you might lose less than 20% on the project. We found when pricing out the cost of our addition that we could save several thousand dollars by doing the trim work and painting ourselves for example.
As for finding a contractor, do you have a building goods store by you? My parents found that their local store was able to offer referrals based upon the builder's reputation and if they paid their bills on time. Another option would be to call local builders and ask them. In this economy, many are not working and will do smaller jobs (as opposed to building a new home from scratch.) If you aren't sure which builders are good quality ones, try calling a real estate office in your town, explain that you are looking for a builder who does good work and ask them for referrals. Often a real estate agent will give you this information because it could lead to a referral bonus for them if you hire the builder.

If you are adding on only to provide a place for your young person to stay for a couple years then the others are right ~ rent is probably cheaper in the long run. On the other hand, if you are providing housing for a person who has special needs, like the person cannot live completely on his/her own ever but needs independence at the same time, then if you can afford it...

Does anyone know how much it would add to my taxes to add stairs to the top level and make it a legal in-law apartment? We already have a kitchen and bathroom, but I'd like my daughter to have her own entrance as well. We purchased the house as a 5 bedroom, so it was never legalized as an apartment, although it had kitchen cabinets already installed. I want to make it all legal, and I know it depends on the location. We're in Nassau County, NY. I'm sure the rate is higher than most places, but maybe someone has an idea? Who should I ask?

Gail, contact your city or county tax assessor.