Kimberlee is an interior designer specializing in residential homes in Seattle. She recently converted her two-car garage into a home office and private guest house, which she rents on Airbnb.
Her decision to turn her 480 square foot garage into an office and short-term rental property was a practical one. After running her business out of a bedroom in her home for six years, she was ready to expand.
Kimberlee’s children were 1 and three at the time, and she had recently hired a junior designer. It was a little chaotic with young kids, and the two of them were working out of her house.
Kimberlee says, “I think I had grown accustomed to the noise, but sometimes the kids would yell and get loud. It’s been great to have my space where I can be close to my kids if they need me, but also have a professional space where I can invite clients over.”
Financing her Garage Conversion
Photo Credit: The Lighting Judge
Kimberlee and her husband purchased their home in 2016 for 450K. They planned to pay for the project, which ended up being ~110K, with a home equity line of credit, HELOC.
They knew since the home market in Seattle is so hot that even within six months of purchasing they’d have equity accrued.
They were right.
They had an online appraisal conducted, but their numbers came back lower than expected.
She requested an in-person appraisal, and their estimated home value went up by $20,000.
Their healthy home valuation, which allowed them to take out a HELOC, coupled with a small loan from Kimberlee’s parents, freed up the financing they needed.
Garage Conversion Budget
Kimberlee put in two bathrooms and had to run plumbing to the garage, which set them back $20,000 and was the single most significant expense.
Permitting: $2,500
Construction Cost: $108,000
Project Total: ~$110,000
Permitting fees are less expensive and less complicated for a guest quarter than an accessory dwelling unit. The difference is that a guest quarters does not contain a full kitchen, making it ideal for short-term guests.
Short-Term Rentals on Airbnb
From the beginning, Kimberlee planned to rent the space on Airbnb. With cost of living growing in Seattle, Kimberlee explained that “it’s just a relief to know you have another stream of income.”
So far, she’s consistently seen 75-90% occupancy and expects to bring in 30K the first year, and 35-40K subsequent years. She thinks she can have the project paid off in 3-5 years.
“Our current rental rates are lower than we’d like.” Kimberlee mentions, “I think you have to play the Airbnb game. Once you have a lot of reviews and superhost status, then you can increase your rates.” Kimberlee has all 5-star reviews, and you can view her Airbnb listing here.
Garage Conversion Design Approach
Kimberlee stresses that you have to think about the end client and who will be using the space. Since millennials seem most comfortable using Airbnb, she kept them in mind through the whole design process.
“I knew I wanted to design it for the adventure seeker, the savvy traveler, and those who appreciate all the little design details.”
She made some bold design decisions like the hunter green kitchen cabinets and patterned tile because while a lot of people might be too timid to make that choice for their own home, on Airbnb people are looking for fresh, quirky places to stay.
When asked about the most challenging part of the process Kimberlee quickly interjected that she, “Loved it all! Seeing the garage transform from such a utilitarian, dingy place to a bright and cheery little retreat was fun and rewarding! If anything the hardest part was making the design decisions because it was hard to choose just one thing.”
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