This is part of our Garage ADU series for San Antonio homeowners. Also in this series: cost · rules & permits · rental income · financing · timeline · FAQs.
A two-car garage converts to roughly 400–500 square feet — a studio or one-bedroom that rents at a real number every month. Here’s how homeowners think about the income side.
The Basic Math
Take your expected monthly rent, multiply by 12, and compare it against the project cost. In San Antonio’s high-demand ZIPs, even a modest garage ADU can generate income that meaningfully offsets a mortgage payment — and the unit keeps appreciating with the property.
Long-Term Rental vs. Short-Term
Many cities allow long-term leases (30+ days) with no restrictions but limit short-term stays. Check San Antonio’s short-term rental ordinances before building your numbers around Airbnb income — long-term tenancy is the safer underwriting assumption.
The FHA Rental-Income Rule
Here’s what changed the game: updated FHA guidelines let qualifying borrowers count 50% of the projected rental income from a planned ADU toward mortgage qualification under the FHA 203(k) rehabilitation program. The rent your garage ADU will earn can help you qualify for the loan that builds it — including garage conversions specifically.
What Lenders Want to See
Document the income case the way a lender does: comparable rents for similar units nearby, a realistic vacancy assumption, and a permitted, legal unit. Unpermitted space doesn’t count — another reason to do this by the book.
Is Your Garage a Candidate?
If your garage is structurally sound, your lot meets setback requirements, and your HOA allows it, you’re likely a strong candidate. The fastest way to find out is a free feasibility review — we’ll tell you straight whether the numbers and the rules work for your property.
Book a free estimate or start with our Casita / ADU Cost Guide for San Antonio & the Hill Country.