Average Cost of Converting a Garage in Los Gatos (2026)

What Does a Garage Conversion Cost in Los Gatos?

Los Gatos is one of the most desirable communities in Silicon Valley, with median home prices exceeding $2.5 million and a strong rental market driven by tech professionals and families. For homeowners sitting on an underused garage, converting that space into livable square footage is one of the highest-value improvements available.

In 2026, Los Gatos garage conversions cost $120,000 to $200,000+ for a full ADU conversion and $80,000 to $120,000 for simpler conversions like home offices or guest rooms. These figures sit 10-20% above Bay Area averages. The premium reflects the town’s hillside lot challenges, affluent market expectations, and objective design standards that require exterior compatibility with the primary home.

For a broader regional perspective, see our complete Bay Area ADU cost guide.

Cost Breakdown by Conversion Type

Not every garage conversion is the same project. The type of space you create determines the scope, the permit requirements, and the final price.

Conversion Type	Cost Range	Timeline	What Is Included
Full ADU (Rental Unit)	$120,000-$200,000+	4-6 months	Kitchen, full bathroom, bedroom area, HVAC, electrical upgrade, plumbing, insulation, finishes, separate entrance
Home Office / Studio	$80,000-$120,000	3-4 months	Insulation, drywall, flooring, electrical upgrade, HVAC, windows, lighting, data/network wiring
Guest Suite	$100,000-$160,000	3-5 months	Bedroom space, full bathroom, insulation, flooring, HVAC, closet, separate entrance
In-Law / Caretaker Unit	$130,000-$210,000+	4-7 months	Full kitchen, bathroom, ADA-compliant features, separate entrance, laundry hookups, HVAC

The biggest cost jump happens when you add plumbing. A home office with no water connections saves significantly compared to a full ADU with a kitchen and bathroom. Once you cross into plumbing territory, expect to add $15,000 to $30,000 to the base cost for supply lines, drain connections, water heater, and fixtures.

Detailed Cost Components

Understanding where your money goes helps you make smarter trade-offs. Here is how the budget typically breaks down for a full ADU garage conversion in Los Gatos.

Construction Costs ($80,000-$140,000)

Component	Cost Range	Notes
Structural work and framing	$8,000-$20,000	Garage door replacement with framed wall, header modifications, any load-bearing changes
Insulation and drywall	$5,000-$10,000	Walls, ceiling, and vapor barrier to meet Title 24 energy standards
Electrical upgrade	$8,000-$15,000	New subpanel, circuits, outlets, lighting, and possibly a meter separation for the ADU
Plumbing	$10,000-$25,000	Kitchen and bathroom supply/drain lines, water heater, fixtures
HVAC	$5,000-$12,000	Mini-split system is the most common choice; ducted systems cost more
Flooring	$4,000-$10,000	Slab leveling, moisture barrier, and finished flooring (LVP, tile, or hardwood)
Kitchen	$12,000-$30,000	Cabinetry, countertops, appliances, and sink. Range varies widely with finish level
Bathroom	$10,000-$25,000	Tile, vanity, toilet, shower or tub, ventilation fan
Windows and doors	$5,000-$12,000	Egress windows, entry door, and optional French doors or slider
Finishes and trim	$5,000-$12,000	Paint, baseboards, hardware, lighting fixtures, and final details

Soft Costs ($15,000-$50,000)

Item	Cost Range	Notes
Permit fees	$5,000-$20,000	Town of Los Gatos building permit, plan check, and impact fees
Design and architectural plans	$10,000-$25,000	Working drawings, structural engineering, Title 24 energy calculations
Utility connection fees	$2,000-$8,000	Sewer lateral, water meter (if separate), and electrical service upgrade

Total Project Cost

When you combine construction and soft costs, most full ADU garage conversions in Los Gatos land between $120,000 and $200,000+. A mid-range project with quality finishes and no major structural surprises typically comes in around $150,000 to $170,000.

What Drives Costs Higher in Los Gatos

Los Gatos is not a typical Bay Area suburb. Several factors push garage conversion costs above regional averages.

Hillside Lot Challenges

Many Los Gatos homes sit on hillside lots, particularly in the areas governed by the town’s Hillside Development Standards and Guidelines (adopted 2004). Garages on hillside properties often present additional challenges.

• Foundation issues. Hillside garages may have stepped or partial foundations that need reinforcement. Soil conditions on slopes can require deeper footings or retaining wall modifications.
• Drainage. Hillside sites require careful grading and drainage planning to prevent water from flowing into the converted space. French drains, waterproofing, and proper site grading can add $5,000 to $15,000.
• Access and staging. Steep driveways and limited staging areas increase labor costs and complicate material delivery.

For hillside properties, budget an additional $15,000 to $40,000+ beyond the base conversion cost.

Objective Design Standards

While ADU conversions in Los Gatos follow a ministerial (non-discretionary) approval process, the town enforces objective design standards. These require the converted space’s exterior to be compatible with the primary home, including matching exterior wall materials, roofing, trim, and window frames. Meeting these standards may require higher-quality exterior finishes than a basic conversion would need.

Affluent Market Expectations

Los Gatos homeowners typically expect finishes that match the quality of their primary residence. In a community where homes regularly sell for $2.5 to $5+ million, a garage conversion with builder-grade finishes feels out of place. Most Los Gatos clients invest in mid-range to premium materials: quartz countertops, custom cabinetry, tile showers, and quality flooring. This naturally shifts the budget upward compared to a basic, no-frills conversion.

Older Garage Construction

Many garages in Los Gatos were built in the 1960s through 1980s and may not meet current structural or seismic standards. Common upgrades include replacing deteriorating framing, adding shear walls for seismic bracing, upgrading the electrical panel from the original service, and addressing asbestos or lead paint in older structures. These remediation items can add $10,000 to $25,000 to the project.

Los Gatos Permitting: What to Expect

Understanding the permit process helps you plan your timeline and budget accurately.

Ministerial ADU Approval

California state law requires cities and towns to process ADU applications ministerially. In Los Gatos, this means no public hearing, no discretionary design review, and no neighbor notification. If your plans meet the objective standards, the town must approve them within 60 days of a complete application.

No Parking Replacement Required

Under California law, Los Gatos cannot require you to replace the parking spaces lost by converting your garage. You can continue parking in your driveway or on the street. Some homeowners add a carport or widen the driveway for convenience, but this is optional.

Permit Fees

Los Gatos permit fees for garage conversions typically range from $5,000 to $20,000, depending on project scope. This includes the building permit, plan check fee, and any applicable impact or utility connection fees. Confirm current fee schedules with the Town of Los Gatos Community Development Department before finalizing your budget.

Timeline

From the start of design to the final inspection, most garage conversions in Los Gatos follow this timeline:

Phase	Duration
Design and architectural plans	4-8 weeks
Permit review and approval	4-8 weeks
Construction	3-5 months
Total	5-8 months

Projects with structural complications, hillside site work, or custom finishes may extend beyond this range.

Garage Conversion vs Other Options

If you are considering how to add livable space, it helps to see how a garage conversion compares to alternatives available in Los Gatos.

Option	Cost Range	Timeline	Pros	Cons
Garage Conversion	$120K-$200K+	5-8 months	Lowest cost, fastest path, uses existing structure	Size limited by garage footprint, lose parking
Detached ADU	$250K-$500K+	8-14 months	Full design freedom, higher rent potential, separate structure	Higher cost, longer timeline, requires open lot space
Home Addition	$200K-$400K+	8-12 months	Expands primary home, fully integrated	Structural tie-in complexity, higher permit requirements
Prefab ADU	$150K-$300K	6-10 months	Factory-built quality control, faster construction	Limited customization, still needs site prep and permits

For a deeper comparison between garage conversions and detached ADUs, see our side-by-side cost and ROI analysis.

Rental Income and ROI in Los Gatos

Los Gatos has strong rental demand. Its proximity to major tech employers, excellent schools, and walkable downtown make it one of the most desirable rental markets in the South Bay.

Expected Rental Income

• Studio / 1-bedroom ADU (400-500 sqft): $1,800-$2,800/month
• Large 1-bedroom or 2-bedroom conversion (500+ sqft): $2,500-$3,200+/month

At a mid-point rental income of $2,500/month, a $160,000 garage conversion pays for itself in approximately 5.3 years through rental income alone. This does not account for the increase in property value, which typically adds $100,000 to $200,000+ for a permitted, finished ADU.

ROI Comparison

Metric	Garage Conversion	Detached ADU
Investment	$120K-$200K	$250K-$500K+
Monthly rental income	$1,800-$3,000	$2,500-$4,000
Payback period	4-7 years	6-10 years
Property value increase	$100K-$200K	$150K-$300K
Resale cost recovery	60-80%	60-75%

Garage conversions offer a faster payback period because the initial investment is significantly lower. For homeowners who prioritize speed to ROI, conversions are the clear winner.

How Custom Home Handles Garage Conversions

At Custom Home (CSLB #986048), we use a two-phase design-build process that eliminates the most common source of budget overruns: starting construction before the scope is fully defined.

Phase 1: Design and Pre-Construction

During Phase 1, our team assesses your existing garage, creates architectural plans, produces 3D visualizations, and locks in a construction price. You see exactly what the finished space will look like and know exactly what it will cost before any work begins. This phase typically takes 4-8 weeks and includes permit submission.

Phase 1 is especially valuable for Los Gatos hillside properties, where hidden structural and site conditions can cause major cost swings. By investing in thorough pre-construction analysis, you avoid the surprise change orders that derail budgets on other projects.

Phase 2: Construction

With approved plans and a locked-in price, Phase 2 is the construction phase. Our team handles demolition, structural work, rough-ins, finishes, inspections, and final punch list. For most Los Gatos garage conversions, construction takes 3-5 months.

Why This Matters for Your Budget

The locked-in pricing model means you will not receive change orders for items that should have been identified during design. If a structural issue is discovered during Phase 1, it is priced into the construction contract before you commit. This is the difference between a project that finishes on budget and one that spirals 20-30% over the original estimate.

Smart Budgeting Tips for Los Gatos Homeowners

1. Get a structural assessment early. Spending $500 to $1,500 on a structural engineer’s report before you start design can save tens of thousands by identifying issues upfront.

2. Budget a 15-20% contingency. Even with thorough planning, older garages can reveal surprises behind walls. A contingency fund prevents you from cutting corners mid-project.

3. Choose your use case before choosing finishes. A rental ADU needs different features than a home office. Deciding early prevents expensive scope changes later.

4. Do not skip the permit. Unpermitted conversions in Los Gatos create serious problems at resale. Buyers and their agents will catch it, and you may be required to remove the work. The permit cost is a fraction of the project total.

5. Compare per-square-foot costs carefully. Bay Area garage conversions range from $200 to $400+ per square foot depending on scope. Make sure you are comparing similar scopes when evaluating contractor bids.

Next Steps

A garage conversion is one of the fastest, most cost-effective ways to add living space and rental income to your Los Gatos property. Whether you are building a rental ADU, a home office, or a guest suite, understanding the real costs upfront is the foundation of a successful project.

For step-by-step guidance on the planning process, read our guide to planning a garage conversion in Los Gatos.

Ready to get a clear picture of what your garage conversion will cost? Contact Custom Home for a consultation. We will assess your garage, discuss your goals, and walk you through our two-phase process so you know exactly what to expect before you commit.