How to Turn Your Shed Into an Apartment


Trends toward alternative housing have spawned previously unthought-of ideas about what structures can be used for living. If you have a large shed in the backyard, you could convert it into a rental income property. A shed apartment is suitable for a single person or a couple looking for minimal space. This project is not for someone without carpentry experience or access to experienced help.

Things You'll Need

  • R-15 or higher insulation
  • Foam insulation board
  • Paneling
  • Moisture-resistant cement board
  • Apartment-sized appliances
  • Shower/toilet combo
  • Sink cabinet
  • Waterproof flooring or cement stain
  • Premium high-gloss paint
  • 2-by-4-inch lumber
  • Nails
  • Drywall screws
  • Drill
  • Hammer
  • Saw
  • Windows
  • Exterior door
  • Wiring
  • Electrical breaker box
  • 3 wall outlets
  • Ladder


  • Clean out any items or rubbish stored in the shed. Dust and sweep the floor and remove spiderwebs.

  • Plan the window locations for each side of the structure. This will provide cross-ventilation and bring light into the apartment. Measure and mark the window locations. Cut out the spaces for the windows. Use the window manufacturer’s directions to install the windows.

  • Plan the location for the kitchen wall and bathroom in the rear portion of the shed. Use opposite corners for the kitchen and bath to save space. Build the walls to separate the bathroom from the rest of the house. Building codes have a minimum allowed space for bathrooms. Use the remaining rear portion of the shed for the kitchen.

  • Install the shower, toilet and sink for the bathroom.

  • Locate the entry point for the water lines. This should also be where the kitchen sink will be located. Run the pipes from the kitchen to the bathroom. Set up the pipes so the cold water line runs into the hot water tank and the hot water line follows it back to the kitchen sink.

  • Set up the breaker box near the front door. Drill guide holes through the studs to hide wiring inside the walls. Install outlets with breaker switches on each wall. Run the wiring from the breaker box through the studs to each outlet.

  • Plan the location of the inset shelving. This is shelving that fits between two or more exposed studs to eliminate using floor space. Attach Styrofoam board for insulation to exterior walls where you are placing the inset shelves. Install paneling over the board for aesthetics. Use nails to hold the panel and board to the wall to avoid splitting either the paneling or the board.

  • Attach 2-by-4-inch boards across the space between studs for shelving. Drill screws through the exterior side of the stud into the ends of the shelves.

  • Install rolled insulation between studs not being used as shelf supports. Set the insulation into the wall with the paper backing visible. Staple the paper to the studs. Apply insulation between the roof rafters using the same method.

  • Install cement board over the insulation and studs. Attach each board to studs with drywall screws 4 inches apart. Apply plastering tape over the board seams. Spackle over the tape and screw heads. Smooth out and wipe off excess spackle with the putty knife. Let the spackle dry. Sand the rough spots smooth.


  • Select a light colored paint for finish. Paint the walls and ceiling. Use a roller for large areas and brushes for corners and small spaces.

  • Paint cement stain over the concrete floor. The floor maintains ambient heat while the paint protects it from stains and moisture.

  • Frame the top of the walls around the rear half of the shed with 2-by-4-inch lumber. This will create the floor for the loft above the kitchen and bathroom. Space your crossbeams 18 inches apart between the frame lumber. Lay plywood over the beams and frame. Nail the plywood into position to create the subfloor.

  • Install the padding for the carpet over the plywood. Lay the carpet over the padding. Tack the carpet to the floor.

  • Place the ladder for access between the loft and the main floor.

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