Building a garage at your property or remodeling or converting an existing one is a major undertaking, and it can be an expensive one, too. And for this reason, many homeowners turn to financing to cover the cost of construction and make affordable monthly repayments.  But how do you choose financing for your project? After all, with so many different options, it’s easy to get overwhelmed. 

In this guide, we help to answer common questions around the average cost of building or renovating a garage and break down the different types of financing that you’re likely considering, from RenoFi Loans and home equity loans to personal loans and more.

Specifically, we’ll look at:

How Much Does It Cost To Renovate or Convert a Garage?

Many homeowners only think about their garage as somewhere to park their car or store outdoor equipment.

But it can also be a great place to create more living space for your family. 

You see, while many homeowners choose to build an addition to expand their home, a more cost-effective approach is often to renovate or convert your garage. Why? Because given that the roof and walls are already in place, it’s often far more cost-effective.

But how much does the average garage renovation or conversion cost?

According to HomeAdvisor, the typical cost for this type of project is between $5,945 and $22,314, with the national average being $14,130. Of course, the scope of the project, your choice of materials and even your location can all affect the cost, and it’s not uncommon for larger or more luxurious projects to creep closer to $50,000 or more. 

The intended end use of your new space will also impact the cost.

How Much Does It Cost To Build A Garage?

Even if you don’t have an existing garage to convert, building one is a project that many homeowners consider for a number of reasons.

According to HomeAdvisor, the national average cost of building a garage is currently $27,768.

A single-story garage will typically cost around $50 per square foot to build, making the average price range for a garage construction project currently sitting between $16,751 and $38,941. 

As a general rule, of course, the larger the area of the garage’s floor space, the greater the cost.

How The Size of Your Garage Affects The Cost

The size of your garage is one of the most important things to be aware of as you design your space given that, in most instances, a garage build will be costed by the square foot – therefore, the larger the garage, the more expensive the project.

Take a look at this handy table to get a rough idea of how much you can expect your project to cost.

Garage SizeAverage Cost Range
Single car garage$10,500 to $27,000
Double car garage$14,500 to $40,300
Triple car garage$32,500 to $72,000
Four car garage$32,500 to $92,000
RV garage$36,000 to $140,000

The Cost of Brick Garages vs Cinder Block Garages vs Metal Garages

Cinder block is a popular choice for homeowners who are looking for a relatively low-cost building material without losing out on quality. The material is particularly popular in areas that may be prone to hurricanes or other extreme weather conditions, thanks to its high durability.

It is also highly suited to covering with stucco or siding, as the installation of these extras is simple and straightforward compared to installing on other materials.

In general, a cinder block garage construction will cost between $25,000 and $50,000 on average, although some factors can push the cost far beyond this upper level. The location of your property, for example, and the amenities and features you wish to add to the structure, will have an impact on the overall cost.

A brick garage structure will be more expensive in most cases. You can expect to pay around $100 per foot for a brick-constructed garage.

A slightly more cost-effective option may be to apply a brick siding over a cinder block base. Typically, this will add between $14 and $28 per square foot to the cost of building the cinder block structure.

Metal garages are often even more cost-effective, and you may be able to find a DIY kit for between $3,000 and $11,000. Another option for metal garage structures is to order a custom build, which may cost up to $40,000. Consult with your local Homeowners' Association to make sure this is permitted in your area.

Breaking Down The Cost Of A Garage

We already touched upon how many different aspects affect the cost of a garage construction project. Now, let’s take a look at those costs in more detail to help you handle your project budget.

  • Project location

If your project is on rough terrain or is in a difficult-to-reach location, this can increase the project cost. This is particularly true in terms of labor as it makes life difficult for teams trying to access your site

  • Garage size

As already noted, the size of your garage project is a key factor in determining costs. The base cost of your project will be derived from the garage’s square foot floor area. Projects carried out across multiple stories will of course carry a higher cost based on this.

  • Framing

Framing provides your garage with a strong and reliable structure. In order to be compliant with the regulations and requirements in your area, you need to make sure you get this framing right. You will generally expect to pay between $1 and $5 per square foot for framing, plus around $4  to $8 per square foot for labor.

  • Roofing

Your structure needs a good-quality roof to keep the elements at bay and to protect the contents of your garage. Roofing can vary a great deal in price, from $1,000 for smaller roofs to over $10,000 for larger projects. Labor will typically cost between $600 and $6,000 on top of this.

  • Slabs

Concrete slabs provide a sturdy foundation for your garage. There are a number of factors that dictate how expensive this can be. But, in general, you are looking at $4 to $8 per square foot. Remember that specialist equipment and techniques will be required to get the job done, which may increase labor costs.

  • Insulation 

Without insulation, your garage is not going to be protected against extremes of temperature in the summer and winter. Depending on the type of insulation, costs range between $0.50 and $3 per square foot. The total amount you can expect to spend will depend upon the type of insulation you choose, with blown-in insulation and batt insulation typically costing between $1,000 and $2,000, and spray foam insulation costing a little more at $1,300 to $3,700.

  • Wall coverings

Depending on your preference, you may decide to choose wood sheathing, plastic or vinyl panels, cement board, metal panels, or drywall to cover your wall area. For drywall, a 4-foot by 8-foot panel is going to cost between $8 and $12, but this does not include labor. Remember that you will be required to install fire-rated drywall for any surfaces that adjoin living spaces.

  • Windows

Not all garages will require windows. But if you would like windows built into your structure, expect to add between $100 and $1,300 to the project, dependent on the materials and on the size of the windows. If you need your windows installed, this will add between $100 and $300 for each window.

How The Cost Of Building a Garage Changes by Location

The cost of your project is also dependent on your location. Take a look at some general price distributions for different states.

StateAverage Cost Range
California$27,000 to $46,500
Texas$16,500 to $43,500
Maine$26,000 to $40,500
Colorado$19,000 to $32,500
New York$17,000 to $31,000
Kentucky$20,000 to $31,000
Washington$20,500 to $30,000
Oregon$17,500 to $30,000
Michigan$16,000 to $28,500
Minnesota$14,000 to $25,000
Illinois$11,500 to $25,000

How Much Does A Carport Cost To Build?

If you need a structure to shelter your car, but perhaps you don’t necessarily need a garage or a similar extension, a carport may represent a more cost-effective option that will still suit your needs.

A carport installation project will typically cost between $3,212 and $9,724 once factors such as materials, labor, and other elements are factored in. 

Why are Homeowners Building and Converting Garages in 2021?

We’re often fast to think about a garage as being somewhere to park cars or store things, but these are by no means the only reasons why homeowners are building garages.

Detached garages, especially, are often being used to create a space that the home lacks, with common uses often including:

  • Home gyms
  • Workshops
  • Home offices
  • Games rooms
  • Pool houses
  • Additional living space 

If you’re looking to add additional space and features that your home doesn’t have, a garage could be the perfect way to do this.

5 Reasons Why It Makes Sense To Borrow Money To Finance A Garage

Finding the right kind of finance gives you the opportunity to expand your horizons. Whether you simply need space to keep another car in great condition or you have something along the lines of a home gym or music room in mind, a garage build or conversion can make this dream a reality. With financing, you have the means to achieve this and make affordable payments over a period of time.

Stay in the Neighborhood You Love

You love your home, neighborhood, and people you know in your area. Why should you have to throw all that in just because you need extra space? The fact is, you don’t! You can simply get the funding you need to finance a garage build or turn an existing one into a new space for a new purpose.

Get the Project Done the Right Way

Perhaps you have been thinking of adding a garage to your property or renovating your existing one for quite a while now, but you just never seem to find the time or the funds. Maybe you’ve saved up a bit of money, but not quite enough to achieve the garage that’s right for you. With funding, you don’t need to do things by halves – you can get the financing you need to complete the project properly.

Get More from Your Budget

With a careful and considered approach to funding, you will find that you don’t need to destroy your savings or leave yourself saddled with overwhelming debt. Instead, you can select the funding product that suits your needs and budget accordingly in the long term.

Increase Your Home’s Value

Using the right materials and installation services makes your new garage an investment in the value of your property. This means you will be able to recoup the amount you borrow further down the line, and you may be able to use this price change to increase your borrowing power in some cases.

Does Building or Renovating a Garage Increase The Value of Your Home?

While a garage isn’t always going to be the first project that comes to mind when you think about adding value to your home, especially given that in many cases it’s more about practicality than luxury, questions around the increases that you can expect to see from this type of project remain common amongst those considering their options.

At the end of the day, if you’re investing an average of $27,768 or more, it’s only right that you want to know how much of this you would expect to get back in added value to your home. 

According to PocketSense, the average garage will deliver an 81% return on investment, meaning that you could expect to recover $22,492 against the average cost. 

But don’t forget the reason why you started looking into your options in the first place, with this likely being as a way to create the space you need that your home is currently lacking. Knowing, however, that you’ll be able to recover the majority of the cost of the build can give you the confidence you need to get going on the project. 

A garage conversion will typically see the same return on investment as a new build. 

The Pros & Cons of 6 Garage Financing Options

We’re the first to admit that it can quickly become confusing when looking at the different garage financing options that exist.

But it doesn’t have to be this way, and below we’ve rounded up the pros and cons of 6 garage financing options to help you to choose the one that’s right for you and that will allow you to borrow all of the money you need with the lowest possible monthly payment. 

A RenoFi Loan

A RenoFi Loan is a new type of home renovation loan that combines the best bits of a construction loan with a home equity loan and can help you to borrow the most money at the lowest monthly payment. 

And they’re the perfect financing option for homeowners who have not built up sufficient equity that they can tap into to pay for their garage build or renovation. And this is music to the ears of newer homeowners who have only recently purchased their property and would otherwise potentially have considered costly personal loans as a way to be able to afford to start construction.

RenoFi Loans let you borrow based on your home’s after renovation value, increasing your borrowing power by 11x, on average, when compared with a home equity loan. Unlike other home renovation loans, you won’t be required to refinance when using a RenoFi Loan, meaning you don’t need to worry about losing that great rate you’ve locked into.

When you build or convert a garage, the value of your home increases by an average of 80%, and RenoFi Loans allow you to tap into that today to finance the construction.

You see, it takes time to build equity, and when we consider that it’s not uncommon for a complete renovation wishlist to amount to more than $100k, homeowners often find themselves in a situation where they know what work they want to carry out but aren’t able to borrow the money that they need using equity.

Building or renovating a garage is rarely the only project that someone wants to carry out, but even when it is, recent homeowners will often find themselves lacking the equity needed. 

For some, this means they reduce the scope. For others, it means turning to high-interest personal loans and credit cards or borrowing money from friends and family. We don’t believe that either are right, and increasing the borrowing power of homeowners who haven’t yet built up the equity they need to finance their renovation is one of the main reasons why we launched RenoFi.

RenoFi Loans are offered both in the form of a RenoFi Home Equity Loan and RenoFi Home Equity Line of Credit, meaning that you’re able to choose the option that works best for financing your project. Choose a RenoFi Home Equity Loan if you know the scope of your project and what it’s going to cost, or a RenoFi Home Equity Line of Credit to be able to draw down on it and cover the cost of home improvements, giving you the flexibility of drawing what you need when you need it.

Here’s what you need to know about RenoFi Home Equity Loans:

  • Loan amounts from $20k to $500k
  • Low fixed interest rates like traditional home equity loans
  • Repayment terms up to 20 years
  • Ability to borrow up to 90% of the after renovation value
  • The full loan amount available at closing

And here’s what you need to know about the RenoFi Home Equity Line of Credit:

  • Loan amounts from $20k to $500k
  • Variable rates 
  • 10 year interest-only period, followed by 20 year amortization
  • Ability to borrow up to 95% of the after renovation value
  • Line of credit that can be drawn down & paid back at your leisure for 10 years

Take a look at how a RenoFi Loan compares with other garage financing options:

Renovation Home Equity LoanSingle-Close Construction To Permanent Loan (CTP)Fannie Mae HomeStyle LoanFHA 203k (Full)Two-Close Construction To Permanent Loan (CTP)
Is this a mortgage?YesYesYesYesYes
1st or 2nd mortgage?2nd1st1st1st1st
Require refinance of existing mortgage?NoYesYesYesYes
Typical Interest RateMarketAbove MarketAbove MarketAbove MarketAbove Market
Loan Limit (Renovation Cost + Mortgage)$500,000Jumbos allowedConforming onlyConforming onlyJumbos allowed
Loan Term (max)20 years30 years30 years30 years30 years
Credit Score Required660+700+620+580+580+
Loan to ValueUp to 95%Up to 95%Up to 95%Up to 96.5%Up to 80%
Can be used for building new home?NoYesNoNoYes
Restrictions on type of improvements?NoNoNoYesNo

If you previously thought your only options would be to turn to a personal loan, to reduce the scope of your project (we’ve heard of homeowners who wanted to build a brick garage downsizing to a cinder block garage, as an example) or to wait until you had enough equity available, we’re pretty confident that a RenoFi Loan could be right for you.

And we’d love to chat through your project with you and help you to understand what makes this type of financing so attractive. Why not arrange a call with one of our advisors? 

Alternatively, use the RenoFi Loan Calculator to see how much you could borrow and what your monthly payments would be.  

How do I know if a RenoFi Loan is right for my project?

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A Home Equity Loan or Line of Credit (HELOC)

Traditionally, a home equity loan or line of credit (HELOC) has been the choice of most homeowners looking to finance a renovation project, whether that’s a bathroom remodel, kitchen remodel or even the construction of an inground pool or outdoor kitchen.

But what’s often forgotten is that it takes time to build up the equity that’s needed to pay for these projects, especially those on the more expensive end of the scale.

Just take a look at the time it can take to build up $100k in tappable equity:

A home equity loan or line of credit might make sense for a homeowner who has the equity available, but what about those who don’t? They’re  forced to look for alternatives, reduce the scope of their project or wait many years.

Let’s take a recent homebuyer who bought their dream home in their dream neighborhood. They fell in love with the property and the location, but it’s in need of renovation work.

Those improvements and additions to the property will undoubtedly increase its value, but there’s not yet sufficient equity available to tap into.

This is a real problem faced by many homeowners, making this type of financing out of reach for many. It’s the reason why RenoFi was launched, and we cannot highlight enough the importance of considering all of your options.

Even if you’ve got the available equity to finance the project you’re wanting to get started on right now, ask yourself what happens next time? A home equity loan might make sense right now, but a RenoFi Loan could help you to borrow all of the money that’s needed to finance your entire renovation wishlist. 

A Cash-Out Refinance

Like home equity loans, it’s not uncommon for a homeowner to turn to a cash-out refinance to borrow the money needed to pay for a garage build or renovation.

But a cash-out refinance isn’t usually the best way to finance a renovation.

Why? Because for most homeowners it means that they’re forced to refinance onto a higher rate, unnecessarily increasing monthly payments and increased closing costs, given that these are based on the total loan amount, not just the amount that’s needed to finance the renovation.

The exception to this is when refinancing will significantly reduce your interest rate and, as a result, your monthly payments. Otherwise, it’s important to consider all of your options and understand which will get you all of the money you need at the lowest possible cost. 

A Construction Loan

Construction loans are primarily intended to be used for ground-up construction of a home, but are often recommended as a way to finance a renovation project. And that includes building or converting a garage. 

These loans are often considered because, like RenoFi Loans, they let you borrow based on your home’s after renovation value, meaning that they’re an option for those who cannot use equity.

But we’re firm believers that a construction loan isn’t going to be your best choice. And that’s for 3 main reasons:

  1. You are forced to refinance, often onto a higher rate that increases your monthly payments.
  2. You’ll end up paying higher closing costs based on the whole loan amount of the mortgage plus renovation costs. These can quickly add up.
  3. A complicated draw and inspection process means that you won’t get the money straight away and that many contractors hate working with this type of loan. Some even refuse to work with them entirely.

If you are considering a construction loan as a way to finance your garage build because of the increased borrowing power, a RenoFi Loan is likely going to be a much better option. 

An FHA 203k or Fannie Mae HomeStyle Loan

Like construction loans, FHA 203k Loans and Fannie Mae HomeStyle Loans let you borrow based on your home’s future value, making them a consideration amongst many homeowners for financing all sorts of renovation projects.

These government-backed renovation mortgages allow you to finance the purchase (or refinance) and renovation of a property into a single loan, again meaning they’re an option for those who haven’t built up the equity that they need.

But both of these types of loan come with their own complexities which can add significant delays to closing, force you to rush the planning process and mean you need to refinance an existing mortgage, usually into a higher rate.

Both of these loans do have a lower credit score requirement than alternatives, however, meaning that they’re sometimes the only option that will allow a homeowner to borrow against their home’s future value if they have a poor credit history.

The credit score requirement for a RenoFi Loan is 660, and if you’re not going to be able to qualify on these grounds, consider either of these loan options and take a look at our FHA 203k Loans vs Fannie Mae HomeStyle Loans guide.  

A Personal Loan / Home Improvement Loan

You’ve probably seen either ‘garage loans’ or ‘home improvement loans’ advertised when considering your options.

But what you might not be aware of is that these are often high-interest unsecured personal loans that are marketed at homeowners looking to finance a specific project.

And while a personal loan will mean you don’t need to rely on equity, this comes at a cost. In fact, personal loans (and credit cards) are almost always going to be the most expensive way to borrow the money you need for your project, with interest rates often between 8% and 15%. In comparison, at the bottom end, that’s almost double what you could pay on a RenoFi Loan.

A higher interest rate means higher monthly payments.

You will find that your borrowing power is reduced when using a personal loan, often making it difficult to borrow all of the money that’s needed. This type of loan also usually comes with a shorter repayment term, further increasing your monthly payments.

For most homeowners, a personal loan isn’t going to be the best way to finance a garage, and better-suited options will exist. This is especially the case for larger and more costly builds.

But, in comparison, for smaller projects at a lower cost, this will be the easiest option, especially when we consider that RenoFi Loans start from $20k. That said, be sure to think about your larger renovation wish list rather than single projects; it might make more sense to choose a different type of financing and get started on that larger project straight away. 

What’s The Best Way To Finance A Garage Build or Conversion?

Whether you opt for a garage or a carport and whether you’re building new or converting an existing one, chances are the project is going to be an expensive one and this is why you need to make sure you have access to the right kind of financing – financing that is ideally suited to your needs. 

And many homeowners are turning to RenoFi Loans to provide them with this. A RenoFi Loan has been specifically designed to assist on this kind of project, providing the perfect balance between a construction loan and a home equity loan.

But when it comes to considering your options and understanding the different types of financing that are available to you, it’s important to ask yourself the following questions:

  • How much is your new garage or renovation going to cost?
  • Do you have a larger renovation wishlist? 
  • How much money do you need to borrow without reducing the scope of the project?
  • How much equity do you have in your home?
  • What’s your credit score and credit history?
  • Do you have any other debt on other loans and credit cards?
  • What is the maximum monthly payment you can afford? 
  • How long do you want to repay the loan over?

Choosing the right type of financing for your garage can mean being able to borrow all of the money you need on the lowest possible monthly payment, so taking the time to consider all options comes recommended. 

Get in touch with our team today to discover more about the benefits of a RenoFi Loan, and to get started on building or renovating your garage.

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