How can we rent space above our garage if we’ve got space to create a 1 bedroom apartment that now is a bonus room?

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How can we rent space above our garage if we’ve got space to create a 1 bedroom apartment that now is a bonus room?

How do we go about doing that? What are the tax implications of doing this?

Asked on April 14, 2019 under Real Estate Law, Oregon

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

1) Can you do this? That is actually a question for your local (e.g. municipal) zoning or housing department. You can it do this if your home is approved as a two-family home and you get a certificate of occupancy for the converted space.
2) Tax implications: any rental income above provable operating costs will be income on which you pay taxes. You should be able to depreciate the capital (construction etc.) over time: an accountant can guide you in that.


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