Should I eliminate a 3rd bedroom?

[Suinda Machuca]

Hello, 

I am in contract for my first Buy and Hold property. Yay!! 

The home is an up and down 2 family home. Each unit has 3 bedrooms 1 bath. There is limited closet space and each room is quite small, maybe 10x11 in size. 

I plan to "house hack", live in 1 unit and rent the other. However I'm torn, should I combine 2 bedrooms to make a large master bathroom with a large closet in the rental unit? Or will I get the bigger bang for my buck by keeping 3 small bedrooms with little closet space? 

I've read that eliminating a bedroom reduces the value of the home because you are removing living space, but I do not want to sell this home. 

Thoughts?