Annexe Income Calculator
Work out the return on converting a garage, basement or outbuilding into a separate lettable unit, including the value it adds.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →Converting a garage, basement or outbuilding into a self-contained unit produces two returns at once: a rental income and an increase in the property's value. Both are real, and only one of them arrives monthly.
The conversion has to be genuinely self-contained to let independently, which usually means separate access, its own kitchen and bathroom, fire separation and often planning consent. Those requirements are what make the difference between a spare room and a lettable unit.
The calculation
Net income = (monthly rent × occupancy − running costs) × 12. The return is that income against the full build cost. Net cost after the value added shows what the conversion really cost you once the property is worth more.
Worked example
A 55,000 conversion letting at 700 a month with 92% occupancy collects 644, and after 120 of running costs nets 524 a month or 6,288 a year — an 11.4% return on the build cost, repaid in about 8.7 years. With 45,000 of value added, the net cost of creating it was only 10,000.
Independent letting has requirements
Separate access, its own kitchen and bathroom, fire separation, sound insulation and usually planning consent are typical conditions, and some jurisdictions treat a separate unit differently for property tax. Price the compliance work into the build cost rather than discovering it later.
Turn a calculation into an enquiry
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Create your free property pageFrequently asked questions
Does an annexe always add value?
Usually, though rarely the full build cost, and the uplift depends on demand for multi-generational or income-producing property locally. Where such units are unusual, buyers may value it as extra rooms rather than as a separate unit.
What consents are needed?
Typically planning permission for a change of use and building regulations approval for fire, insulation and services. Creating a separate unit without consent can make the property difficult to sell and may trigger enforcement.
Does it change my property tax?
It can. Some jurisdictions assess a self-contained annexe as a separate dwelling with its own charge, which is a recurring cost that should be in the calculation. Ask the local authority before starting work.