SHOULD WE ADD A 3RD BEDROOM TO OUR BRRR INVESTMENT HOUSE?
We have just started renovating the Duplex House (with a first floor 2 car garage) that we have purchased to Buy, Renovate, Rent and Refinance. (BRRR). We are wondering if we should change our plans and and change this 2 bedroom duplex with garage into a 3 Bedroom Duplex with no Garage. We believe we could get $200 more for each apartment if we made it into a 3 Bedroom. But we don't really know.
We have designated $30,000 for renovation and have not figure out how much additional this conversion to a 3 bedroom will cost.
As it stands now, we have to replace the ceiling of the garage because of water damage and the garage doors are damaged so 2 garage door have a $800 replacement estimate that is included in our $30,000 renovation costs. In addition the 2 Car garage is presently a large 1 car garage as the previous owner removed the dividing wall. The dividing wall has to be replaced one way or another and it has to have a supporting beam to make it into the original 2 car garage. If we convert the garage into Bedrooms we will have to reconfigure the front with siding and a wall. So the conversion would need A wall and siding, a floor, Dry Walls. I am wondering if we would need 2 bathrooms since it is on a lower level and that would be really expensive?
The conversion, we would hope would add $200 a month to each apartment (total + $400) and that would add + $4.800 to our gross rent.
Are we thinking about this correctly? Would eliminating the garages and increasing the bedrooms add to the value of the Duplex? How much additional money is this conversion going to add to our estimated $30,000 renovation cost? Will the house appraise for more as a 3 bedroom with no garage then a 2 bedroom with garage?
Your input would be appreciated.