Student housing rehab

[Jonathan Greenberg]

Hi all. I’m on my second project and now I’ve bought a property that is 4 blocks from a major university. It’s a typical 3bdrm 1 bath. 1200 SQ ft row home in Philadelphia. I am considering getting rid of the first floor dinning room and adding a small bedroom and bathroom so I can make this a 4bdrm place. I figure I am going to rent to students and if I remove the dinning room then I would benefit in having another rentable room and making it a less desirable party spot. I am a little concerned about making the change because I am wondering if tenants will be turned off that there is basically a small living room/kitchen and that is the only communal space in the house. I figure originally I was going to get 500/room so 1500. Even if the three original rooms dip to 400 and the one with its own bathroom goes for 500 than I’d be at 1700 which would be a win. I am gutting the house regardless so the added cost is not great. Do these numbers make sense or will I get a bigger dip in rent with a smaller communal space? Anyone have any experience doing this? And also would this be hurting or helping the long term property value of the property? Thanks in advance!! Jon G