Cheapest real way in, garage conversion or prefab in the yard

Question

I've got a few rentals and I'm hitting a wall on down payments, so the ADU thing looks like a way to add a unit without buying more dirt. My own house has a detached two-car garage I don't need.

What I can't figure out is whether the garage conversion is genuinely the cheap route or whether it just looks cheap until you open it up. Prefab quotes I've seen start around $100k for a small unit delivered. The conversion looks like it should be half that since the walls and roof exist. But the garage has a slab with no insulation under it, no plumbing anywhere near it, and I'm guessing that's where the money goes. What's the realistic floor to get one legal unit produced, and what do people spend it on?

Rena Guide · Accepted Answer

Garage conversions are usually the cheaper path, and the reason is exactly what you said: foundation, walls and roof already exist, and those are big line items. The catch is that an existing garage was built to garage standards, so bringing it to habitable standards is where the budget lands.

The common costs on a conversion: plumbing run from the house or the street to a new bath and kitchen, which means trenching and a sewer connection. Insulation in walls, roof and often the floor, since an uninsulated slab is cold and may not meet energy code. Electrical, usually a subpanel and sometimes a service upgrade at the main house. Ceiling height, since some garages are too low once you add floor assembly and drywall. Replacing the garage door opening with a wall and windows. Egress windows in any sleeping room. Then permits and any impact fees the city charges for a new dwelling unit.

Realistic total for a conversion in a moderate-cost market often lands somewhere in the $80,000 to $150,000 range, and prefab detached units commonly start near $100,000 for the shell before site work, with all-in ADU costs across the country running $100,000 to $250,000 or more. Site work on prefab is the number people forget, foundation, utility trenching, crane or delivery access, and it can add $40,000 or more.

Before you price anything, check whether your city requires replacement parking when you remove a garage. Some ordinances waived that, many didn't, and a required new parking pad can cost more than the item you were trying to save on. Ask the planning counter that question by name.

jordan_ellis2 · Answer

Ceiling height is the one that killed the version I was scoping. Garage was 7 foot 10 at the low point and code wanted 7 foot 6 finished, so once I added a floor assembly and drywall I was under. Raising the roof turns a conversion into a rebuild.

bmoreno23 · Answer

Where does the sewer connection cost come from? Is it the digging or is it a fee the city charges for a second connection?

aliyah_b · Answer

@ember both, in the places I've called. Trenching quotes I've been given run $80 to $150 a linear foot depending on what you're cutting through, and then some districts charge a capacity or connection fee for adding a dwelling. One district quoted me $6,800 for that fee alone. Ask the water and sewer district directly, they're often a separate agency from the city.

joe_delgado5 · Answer

Watch the timeline more than the price. Permit review plus construction on a conversion has run 9 to 14 months for people I've talked to, and you're carrying holding costs the whole way with zero rent. On a thin deal that alone decides it.

chriswalton8 · Answer

@keystone if down payments are the constraint, the funding question matters as much as the build question. Cash-out refi, HELOC and construction-to-perm all price differently and a construction loan on an ADU can require draws tied to inspections, which slows the contractor. Worth asking two lenders what they'll actually do on an owner-occupied ADU build before you pick conversion or prefab.

Cheapest real way in, garage conversion or prefab in the yard

6 replies