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?

UPDATED: Apr 14, 2019

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 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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