Basement Garages and Cost Approach

[Greg Parker]

In Philadelphia, we have rowhomes that have a basement garage built in.

When I work these basements on the cost grid, I typically use the same formulas as for an unfinished basement, use the total square footage of basement + garage and call the whole thing a full basement. I then outline what I did in the comments section, and have never had a problem until today. Today, I got an underwriter from saying the garage was worth more than the basement (I agree... on the sales grid. ANY place to park has value in parts of Philadelphia) and that my values were wrong on the cost approach.

If anyone else does this, I would like to hear the opinions. It seems to me that even though you can park a car in the basement, so long as this area is not finished, there is little difference from a cost point of view.

 

[Thomas Fiehler]

If these are the typical older buildings-who cares! I calculate my cost data as a basement and add for OH doors. I consider it a full basement in the market approach.

 

[BenLuby]

About the only difference would be the cost of the garage door and EDO. Otherwise, I agree with you completely.

 

[Bill_FL]

In the cost approach, I have always costed it out as a basement, then added the lump sum figure for the basement garage. (the line under the garage grids) in M & S.

 

[Andy Taylor]

In the CA I do it the same way as Bill.

 

[Greg Parker]

Thanks. Now that I feel as though I am probably in the right, I can figure out a professional way to say stop sending these ignorant stips. I will admit that for whatever reason, I never figured in the OHD. Mistake on my part that can be corrected in future.

 

[TEL2002]

Did you add the additional concrete wall into your cost approach. Most basement garages I've seen are concrete/block on all 4 sides of the garage.

 

[Richard Carlsen]

I tend to agree with the UW. The full basement (sans garage) would cost less to construct than the full foundation configured to have a partial basement and a built-in garage. Hence you would have to show a higher cost in the CA. But my guess is that it also would not cost that much more (maybe 1.5 to 2%) more in construction cost.

And IMNSHO opinion a basement with a built-in garage is not a full basement. I think the difference in utility has to be considered.

As to value, the market will tell you if the area used as a basement contributes more to value configured as a built-in garage or as basement. My market indicators are that the scale is tipped slightly to the garage contributing more value than an unfinished basement.

Must have been a slow day at the UW ranch for an issue to be made of something like this.

 

[Steve Owen]

I agreee witht that, Richard. And, in addition to difference in utility for a garage versus a basement, there is also a difference in utility to consider for a built-in, below grade garage versus an attached garage on the same grade as the living area. Both of those factors are related to the sales comparison approach. Where I suspect the poster got in trouble was in not explaining the added costs for having a garage in the basement.

I have seen examples where there was little additional cost... mostly the garage door. But, I have seen other cases where the additional cost was considerable. Those costs could include items such as floor drains, separating walls, lighting, built-in storage areas, work shop areas, and retaining walls. Generally, I do it the way Bill Potts posted, but there are exceptions.

 

[Richard Carlsen]

Steve;

I think once you have watched the process of putting in a full basement and then watched what it takes to construct a built-in basement with headers for the doors and the openings, etc., that a built-in garage costs more is not surprising. You just don't build a full basement and then take a chain saw and cut an opening for the doors. (except in a few geographic locations which will remain un-named)