7 Ways to Create BRs, BAs & Value-Add Amenities for Your Rental [With Before/After Pics!]

by | BiggerPockets.com

With apartments and other commercial real estate, it’s common to talk about a “value add” or a “value play.” These are basically improvements that you can add to a property to increase the property’s value more so than the cost of the improvement.

Thus, “value add” investors are often looking for a property they can upgrade or alter in some way to increase value instead of simply investing in a performing asset and getting a certain return.

While most single family investors think in terms of buying and rehabbing a property to be all in for 70 or 75 percent of its market value, there are also value-add opportunities that can drastically improve your ability to get the highest rent or sales price out of a single family home.

1. Adding a Bedroom

The most important time by far to add a bedroom is when you have a 2-bedroom house, although this is only true if the house has enough square footage. Indeed, when you have more than three, sometimes you can afford to lose one. We had a house with four very small bedrooms once. People tend not to like small bedrooms, so we simply cut out a wall between two of them, and then instead of refinishing the hardwoods in that room, we added carpet to hide where the wall was on the floor. Yes, we lost a bedroom, but there was now an awe-inspiring master bedroom to impress prospective tenants.

Now, the reason it is so important to have at least three bedrooms if possible is that most families who have kids want at least three bedrooms. That’s true even if they only have one child because often the third bedroom is used as an office. And given that, if you have a house with two decent sized bedrooms and can only make a small third, it’s probably worth doing.

There are several things to look for when attempting to add a bedroom. The first thing you have to note is that unless you plan on building an addition (an expense that I don’t believe is usually merited), you will need to sacrifice something for that extra bedroom. You must ask yourself, what are you willing to sacrifice?

The best situation is when there is a bonus room. You do not want to turn all of your common areas into bedrooms. You’ll need at least a living room and preferably a living room and a dining room. But houses often have a bonus room or something to that effect. As long as it’s large enough—in most cities, 10 feet by 10 feet—all you need to do is add a door (maybe a wall) and a closet, and you’ve got a bedroom. And if the tenants who move in want it to be a bonus room, they will still have that option.

Also, be on the lookout for extra large living rooms. You don’t want to get rid of most of the common area, but some houses, particularly some older ones, are just laid out ridiculously. Taking a slice out of one of those rooms to add a bedroom has made sense for us on more than one occasion.

Related: 8 Clever Ways to Save Big Bucks on Your Next Fix & Flip

And, of course, there are more drastic ways.

2. Garage Conversions

I am usually not a fan of garage conversions. For one, they usually look awkward, even if you replace all the siding in front. Most of the time, it just seems like something is missing when you look at a house with a garage conversion. Indeed, a study by G. Stacy Simans and David A. Macpherson found that a garage added 13 percent to a property’s sales price, while an additional bedroom added only 4 percent with square footage being held constant.

That being said, there are times when garage conversions make sense to do.

There is a large subdivision called Ruskin Heights in Kansas City that is rather depressed. Virtually every house there is a 3-bed, 1-bath ranch. Many of the tenants in this area are on Section 8. And since the amount Section 8 pays is partially based on the number of bedrooms, many investors converted the garage to an additional bedroom.

There might also be situations where a house has only two bedrooms, but both an attached and detached garage or a 2-car garage. In these cases, it would sometimes make sense to convert the garage.

3. Finishing Basements and Attics

OK, I will note that I am almost always against finishing a basement. I have walked into far too many REOs with half-finished basements that some hapless homeowner thought they could take out a second mortgage on to finish before it all inevitably went awry. This is doubly true since many appraisals won’t even count bedrooms, bathrooms, or square footage in finished basements (even walkouts). Instead, they just check a box titled “finished basement” and give you a little adjustment.

For me to even consider finishing a basement, the following things must be true:

  1. The neighborhood is strong.
  2. It is a walkout basement (one side is above ground, one is not) with easy egress.

If both aren’t true, forget about it.

If it is a walkout basement, finishing it might make sense, though—especially with basements that already have solid walls and some sort of ceiling over the floor joists. For example, the following picture is in a finished “basement” because the other side of the house is below grade:

Picture 1

Appraisals may not always consider this space, but buyers and renters sure will.

Just make sure any bedroom you put in a basement has an egress window (one someone can get out of) in case there’s a fire. It’s against code for a bedroom not to have this.

And one more quick note. Even if a basement is not a walkout, but is orderly and preferably (although not necessarily) has a ceiling, painting the walls white and the floor grey makes it come to life as a sort of semi-finished basement. And it’s really cheap to do:

Picture 2

4. Making a Half Bath Whole and Adding Bathrooms

Some half bathrooms are really small, and there’s just nothing you can do. But if there is extra space, it’s a good idea to finish it. That expense will almost always pay for itself. From that same study noted above, a full bathroom adds 24 percent to the price, whereas a half bathroom only adds 15 percent.

Stand-up showers just don’t take up that much space. So, for example, if a bathroom looks like this:

Picture 3

It very well is worth adding a shower since you’ve got the room, even though you’d have to move the toilet and replace the vinyl to do so.

As far as adding a full bathroom, unless it is a huge house, I would only consider it if the house had only one bathroom. Other than that, it really depends on the value of the house and whether there is space for it. In lower-end neighborhoods, it would generally not make sense. But in higher-end neighborhoods, it very well might. This is especially true if there is a genuine master bedroom that lacks a master bath. In those cases, I would likely add one.

5. Opening Up the Kitchen

There is nothing that sells a house like the kitchen. Any confined, closed-off kitchen simply won’t do. Sometimes, however, there’s no good way to add space to a kitchen. Luckily, you can still make it feel open by opening up a wall to the living or dining room. It could be as simple as cutting a rectangle in a wall. And you can even add a bar top to that for an added bonus.

Here’s an example of one such god-awful kitchen we had:

Picture 4

Now just look at the difference opening up that wall and adding a bar top made:

Picture 5

Picture 6

And even something like this helps immensely:

Picture 7

6. Adding Storage

If a house has neither a garage nor a basement, it is probably a good idea to add a shed in the backyard. People like their stuff and need some storage for it. You can buy a shed from Home Depot of Lowes for less than $1,000, and a lot of prospective renters and buyers will need something like this in order to sign on the dotted lines.

7. Improving the Aesthetics (Particularly the Front)

Never underestimate the power of aesthetics. Even small things can make the difference. Compare the following two pictures of the same 4-plex:

Picture 9

Picture 8

All we did here was paint the trim, add window boxes and awnings, and it completely brought the property to life.

Or even something more simple, like this:

Picture 10

Picture 11

Related: How to Reposition an Apartment Complex and Add $2,000,000 in Value in 12 Months

There are all sorts of easy fixes like this that add far more value than they cost:

  • Repaint the front or just the trim
  • Wash the house or power wash if need be
  • Add window shutters
  • Add window boxes
  • Add window awnings
  • Remove ugly window awnings
  • Remove satellite dishes
  • Replace an ugly exterior light fixture
  • Paint the front door
  • Replace the mailbox and/or address numbers
  • Weed kill the driveway
  • Hedge the trees and bushes in front as well as basic lawn care
  • Add bark mulch to the front yard
  • Plant grass if the lawn is dead
  • Add paver stones if there is no walkway to the house other than the lawn
  • Repair any unsightly fences or gates
  • Add some arborvitae or other plants
  • Etc.


There are certainly other ways to add value, including more drastic measures, such as mother-in-law quarters, turning the house into a duplex, adding an addition, etc. But for the most part, the above ideas can add substantial value to any flip or rental, and you should be at the ready to use them when the time comes.

We’re republishing this article to help out our newer readers.

What additions or renovations do you add to properties to increase value?

Let me know with a comment!

About Author

Andrew Syrios

Andrew Syrios has been investing in real estate for over a decade and is a partner with Stewardship Investments, LLC along with his brother Phillip and father Bill. Stewardship Investments focuses on the BRRRR strategy—buying, rehabbing and renting out houses and apartments throughout the Kansas City area. Today, they have over 300 properties and just under 500 units. Stewardship Properties on the whole has just under 1,000 units in six states. Andrew received a Bachelor's degree in Business Administration from the University of Oregon with honors and his Masters in Entrepreneurial Real Estate from the University of Missouri in Kansas City. He has also obtained his CCIM designation (Certified Commercial Investment Member). Andrew has been a writer for BiggerPockets on real estate and business management since 2015. He has also contributed to Think Realty Magazine, REI Club, Elite Daily, Thought Catalog, The Data Driven Investor and Alley Watch.


    • Andrew Syrios

      And the amazing thing is how little it can take. For the house in the 2nd set of pictures, all we did was add a window box, paint the front door red, mow the yard, hedge the tree in the yard and put some red bark mulch in front. Maybe $500… Maybe.

      • Aaron Harms

        I love the window box. It gives a nice dimension to an otherwise flat face of the house. Nice work. I typically like to stay away from red mulch – and other dyed mulches. The color fades quickly in the sun. Cedar is a great way to go, as it lasts longer, and looks richer, in my opinion.

    • Andrew Syrios

      I’ve seen this done, although I would note two things; 1) It’s often in a finished basement, which I think is fine or 2) it’s a master bedroom and in these cases, it’s has to go with the flow of the room. It’s a little hard to describe and I don’t want to go all feng shui, but when I’ve seen this done right, it feels like it’s the first stage of the bathroom and not part of the bedroom. If the bedroom isn’t that big, or is just a rectangular shape, I don’t think this is a great idea. But if you can put the sink in a cove that is right next to the door to the master bathroom (and probably vinyl or tile the floor by the sink, I’ve seen that look good.

      • Jason Hinton

        The last house we rented had this arrangement in the master suite and it is absolutely awful for spouses that work different schedules. The sink and vanity were useless as they couldn’t be used while the other person was sleeping.

        On the North wall of the Master suite:
        East side – shower and toilet in small room
        West side – large walk-in closet
        Center – Double sink vanity

  1. Brad Lohnes

    Great article, Andrew, thanks. It’s always good to be reminded of the things that really add value or rentability, depending what you’re after. I was happy to see the mailbox listed on there; what’s the first thing that someone looking for the house will see? Usually the mailbox with the street number on it. If that’s falling apart, it’s an instant bad impression. Anyway, in my current market, I think it could be smart to look for 2-bedroom houses with room to create a 3rd. Thanks.

  2. David Krulac

    Andrew, Great article, I’m with you.

    We added a fifth bedroom to a large house by eliminating the dining room. There already was a large living room and family room off kitchen. Tenants liked it have stayed 22 years, so far.
    Added a hall to eliminate a walk through bedroom, now still 3 bedrooms, but no walk through.
    Changed a 3 bedroom to a 2 bedroom, small house, small rooms, not typical approach but helped make the house nicer.
    2. GARAGES
    I’ve never done a garage conversion to a bedroom. Some people don’t have a strong preference for garages, but I sure do especially on cold snowy/ice winter days. Lots of the times the garage conversions still retain the driveways leading to a wall. Also saw a place where they left the overhead garage doors and drywalled over them on the inside, awkward. I bought a house that the entire house was a garage, that a former owner converted into a house without a garage. And I did convert a 1940s small garage to a kitchen, but at the same time added a 2 car attached garage to the same house.
    Don’t like finished basements either, too damp, sometimes wet, low ceilings (I’m tall over 6 feet), and lots of duct work, pipes and mechanicals like furnace, C/Air, Hot water heaters. According to the USPAP, uniform standards for Appraisers in the US, basement square footage is NOT to be counted even if the basement is only 1 foot below grade. While they can’t count the square footage they can add value for the finishes. I also don’t like basements because of fire hazards. Not only must the windows be egress windows, which are large enough for a fire fighter fully equipped with all equipment including O2 tanks, the window sill can’t be too high and if below grade there must be a window well with permanent non-flammable stairs. The tiny typical basement windows are just plain unsafe. We do have some properties where there are existing finished basements, and if a tenant or prospect indicates that somebody will be sleeping there, that would disqualify them from renting. I have added some attic rooms. We changed a 3 br house to a 5 bedroom house by finishing the attic, as well as a 1 br apt to a 3 br apt. and a 2 br house to a 4 br house. In the latter the house was built before indoor plumbing and when the toilet came inside they took over a whole br for the new fangled bath. Another place that had that done we added a 3rd br in the attic with a 4′ x4′ skylight, really set off the bedroom which already had 2 other windows.
    4. ADD BATHS
    At one place turned a large pantry room already with a window into a full bath with shower, adding a 2nd full bath to a 3 br house. A couple of other places added a half bath in a closet. And at another place took part of an above grade furnace room to made a half bath. If possible there should be some bath on every finished level of the house/apt.
    Totally agree

  3. Bob Norris

    Andrew, great article, thanks. I am looking at a house this afternoon and trying to do exactly this type of renovations. Your article is quite helpful. To make a late 70’s house into a more modern floor plan, if possible, would you open up the kitchen, dining room and family room?

    • Andrew Syrios

      Whenever it’s possible and not prohibitively expensive I try to open up the kitchen. I’m not as much a stickler on it with the dining room and family room although if it makes sense to do, I would certainly do so. I would take those rooms on more of a case by case basis.

    • David Krulac

      Depends on your local code rules. At one place we added 4 bedrooms, 35 new windows, ripped off old siding, added insulation and new siding and did not need a permit, because we didn’t change the footprint.

      At another place replacing shingles required a building permit and replacing the furnace required a building permit, so it depends on you local government

  4. Kathleen Leary

    ” . . . — all you need to do is add a door (maybe a wall) and a closet, and you’ve got a bedroom.” Not so fast!

    Although this is full of good, do-able information, I’d sure check whether your municipality allows bedrooms with no egress windows. I’m right over the state line from you & every bedroom has to have one exit via a door & one accessible egress window.
    Be a damn shame to have to rip everything out when the inspector shows up . . . yes, it does happen!

    • Andrew Syrios

      I should have noted this, but yes, I think almost every municipality requires two modes of egress so the room you make needs to already have (or you need to put in) a window. There are few other things you need to often too, like moving or adding outlets and switches as well as sometimes duct work and maybe adding or moving light fixtures.

  5. Christopher S.

    Grat article! Good advice on curb appeal. I have made those mistakes before. How do you feel about replacing the front door? I know you mentioned painting one in your example but how often will you replace with a more expensive one with more curb appeal?

  6. Shell Oakley

    I know this post is late but I just found this article and I’m hoping you’d be able to give me a little advice. I have a 1950s house in St. Louis that has 3 bedrooms and 1.5 baths. The “master” has the half bath and it is tiny. All of the rooms are rather small as well with next to know closet space. I have a finished basement with two bedrooms (one with an egress window). The area I live in sells 2 bedroom and 3 bedroom house’s for close to the same amount depending on how nice they are…some have never been updated and some are flip homes (like mine) and have been updated. I would like to change the main floor so it has a 2 bedroom 2 bath so that the master becomes a real master bedroom and the second one has closet space. Is this wise or foolish? Im hoping the space in the basement helps to make up for this. Yay or nay? Thanks for your help!

  7. David Krulac

    3br almost always sell for more. But I did once change a 3 br in to a 2 br, however that was only once out of 900 properties that I’ve bought and sold. Here’s an easy way to calculate the value of a 3rd bedroom. Go to http://www.huduser.org and for your area look up what the fair market rental is. In my area the difference in rent AVERAGE for a 3 br compared to a 2 br is difference of $263/month. If you follow the 1% rule a 3br is worht $26,300 more than a 2 br in my area. your mileage will vary.
    David Krulac
    Bigger Pockets Podcast #82 guest

  8. Kuntay Talay

    Andrew, T

    hanks for posting this.. It is a great article!

    I have a 4-plex in Grandview, MO with two additional walkout units (5th and 6th unit) on the basement. We are in the middle of the rehab. I am thinking of converting the garage into a bedroom on the 5th unit. We will see how it goes. I know it will add value especially in the section 8 environment as you mentioned.

    Hopefully, when it is all set and done the property will be a commercial property with 6 units. I will keep you posted.

    Kuntay Talay

  9. Frank Schwarz

    Excellent article. I also DISLIKE garage conversions. Horrible idea and almost never worth someone losing the ability to get in and out of a vehicle in bad weather or iffy neighborhoods.
    They can always get a bunk bed or another place to live, but you can spot a garage bedroom from down the block.

  10. John Murray

    My biggest money makers are 4 bed 2 or 3 bath and 2500 SF+. These are very difficult to find within the city limits and 6 miles to the city core with a suburban feel. Paid about the same as the 3-2 ranch but needed more work. The work was about 300 more hours. I do my own work so no big out of pocket. The profit is in beds and baths and close to the city core.

  11. jairo munoz

    Great article. I bought a fixer upper house in July that I saw potential in. I have added a bedroom in what was a large den area that still has space to be used as a small dining room. I will convert the laundry room to a 1/2 bath soon. I plan to do the BRRRR strategy.

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here