Does a Finished Garage Increase Home Value?

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You know that a custom garage is going to cost a decent amount of money. How much can you expect to get back when you sell your house?

If you’re like me, you’ve probably spent hours looking at pictures on Pinterest of custom garages. After the initial glow has worn off, you’re finally ready to think about money.

Does a finished garage increase the value of your home? Not exactly. A finished garage won’t increase the value of your home’s appraisal. However, it may add a “wow” effect to potential buyers and shorten the time that your house is on the market.

I did a lot of research at the beginning of my garage transformation project, and there’s a lot to consider. Let’s dive into some of the details.

What is a “finished garage” exactly?

“Finishing” a garage can mean something different, depending on the style of your home. We’re going to be using a pretty generic definition that will work for the majority of recently built houses.

A finished garage should have the same basic characteristics as the other rooms in the house.

That means that you shouldn’t see any exposed ductwork, electrical components, studs or beams of the house. If you’ve got drywall throughout the rest of your house, that needs to continue in the garage. Depending on where you live, you may even need to add insulation, heating or air conditioning to the garage. The floor can be tile, epoxy or even exposed concrete, but it should be sealed against leaks and spills.

Lighting and air circulation are also critical. A brightly lit room and a well-placed fan can go a long way to making the room feel more comfortable and inviting.

If your house is a rustic cabin or has an industrial theme, then the beams and ductwork is all part of the vibe. If you make your garage feel as comfortable as the rest of the house, you can say your garage is “finished.”

What does a finished garage do to the home appraisal?

Here’s where the rubber meets the road.

I spoke to a couple of home appraisers in some of the biggest real estate markets in the country to see if they took a finished garage into their home valuations and if it really made a difference.

It turns out, it does make a little difference, but not nearly as much as you’d like.

A typical garage renovation can cost several thousand dollars by the time you account for drywall, paint, flooring and garage storage.

The storage cabinets are going to account for a lot of that cost, but they won’t help in the appraisal. A real estate appraisal only looks at things that are part of the house. Most garage storage solutions won’t qualify because you can take it with you when you move.

That leaves the drywall and the flooring. They usually add less than 50% of what you paid for it to the value of the house. In general, you’re talking about an extra grand or so to your home’s value.

Beyond the numbers: adding “curb appeal”

OK, so a finished garage has little to no impact on your home’s appraisal. However, you may be able to add to your home’s curb appeal. That may be just as good.

What is curb appeal? Curb appeal is anything that will make your home stand out when you compare it to other homes of similar features in your area (we call those ‘comps’).

When I grew up, my mom was a Realtor in Pennsylvania. I heard a lot about staging houses for potential buyers.

She would spend countless hours walking her sellers through all the little details that would give home buyers the best first impression.

If a house had a great first impression, more people would be interested in it. The house sold faster, for closer to the asking price.

What does that have to do with your garage?

People expect a messy, unfinished garage. If you don’t believe me, take a drive through your neighborhood on a Saturday afternoon. Most people have to park their cars in the driveway because their garages are full of junk.

A clean, organized, finished garage goes a long way to making your home stand out.

What about converting your garage to a gym or additional bedroom?

This is where it gets tricky. If you want to convert your garage into something other than a home for your car, there’s a lot more involved.

According to the, a one-car garage can add up to $5000 to the value of your home. It stands to reason that you’d lose at least that amount of money if you decide to renovate your garage into another room.

Many home buyers (myself included) won’t even consider buying a home without a garage.

Any time you’re converting a non-livable space into a livable space, you’ll need permits from your local city government. They want to make sure that the work is being done safely and professionally.

They have to think about your family’s safety, as well as the next owner’s when you decide to sell the house. If your conversion doesn’t meet building codes, you could actually end up losing a lot of value in your home.

If you do decide to convert your garage into a gym or workshop, I recommend converting it in such a way that you can change it back when you’re ready to sell the house. For more permanent renovations (like turning it into an extra bedroom), I recommend leaving this type of garage renovation to the pros.

If you’re looking for more ideas on how to spruce up your garage, I recommend checking out my article How to Finish Garage Walls.

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