Open Floor Concept or Add Another Bathroom?

Question

Hi BP, I just had an offer accepted on my very first house hack in Bay Area, CA. This is a 5 bed 3 bath older SFR. We're starting to think about how we will update/add value to the house, and as part of the consideration, we're deciding between adding a fourth bathroom to part of the living area (better cash flow), or opening up the walls between the kitchen and living areas to create an open floor concept (forced appreciation). We still need to get a quote from the GC about how each would cost, and we will try to do as much of the work ourselves as possible.

Adding the fourth bathroom would lead to better cash flow, but we believe the open floor concept will add more value in terms of equity and forced appreciation. How would you go about making this decision? Anything we should consider? Thank you in advance!

Account Closed · Answer

I’m from Ohio, so I don’t have any idea what is the standard layout in your area. Please clarify if the existing three baths are all full baths, and if your proposed fourth would also be a full. You mentioned that you wanted to add it to the living area; does that mean it will be in an odd place relative to the bedrooms? I wouldn’t want to have to walk through a living area to take a shower. Also, how big is the house and how much space would the new bath take up relative to the house size? And are five bedrooms common in your area?

You also mentioned trying to do most of the work yourselves. That will be very difficult to do if you aren’t a plumber and you end up adding the bathroom. And please make sure you don’t remove a load bearing wall improperly if you decide to go the open concept route.

You also mentioned trying to do most of the work yourselves.  That will be very difficult to do if you aren’t a plumber and you end up adding the bathroom.  And please make sure you don’t remove a load bearing wall improperly if you decide to go the open concept route.

Wendy H. · Answer

Thanks Account Closed, yes the existing three baths are all full baths, and the proposed fourth would also be a full. We would add the bathroom to a nook of the living room that is behind the kitchen walls. You wouldn't need to walk through the kitchen/living area, but it would be down the hall and the first thing you see before you go to the kitchen/living area. The house is ~2300 sq ft and we are thinking a 5' x 8' bath. Five bedrooms aren't the most common but also not rare either. We would be renting by the room hence better cash flow with the bathroom.And thank you for the reminders any load bearing walls - we'll have the GC confirm. We will also definitely be having the contractor do plumbing/electric work.

Wendy H. · Answer

@KB Collins Thank you for the input!

KB Collins · Answer

The real analysis we have to look at is which will add more value to a project.  Personally without any vetting or review of your project, every time I added a bathroom to my projects in the past it always paid off.  No distance may vary!  I love when car commercials say that.  If your buyer wants an open floor plan you may have to find another.  Best of luck to you!

Wendy H. · Answer

@Chris Herrera Really really great points. I do think we'll hold long term but wouldn't hurt to reach out to some agents like you mentioned. Thank you!

Chris Herrera · Answer

@Chris Herrera *bathroom

Chris Herrera · Answer

What’s your long term strategy for the property? If it’s going to be a rental for the foreseeable future than cash flow should be your target.

If you’re planning on selling it and leaning on appreciation in the next year or so than maybe the open concept to appeal buyers would be the way to go.

Someone in your local market should be able to give you a better estimate of the value you’d get if you sold it with an extra bedroom vs open concept so you should reach out to some agents.

Especially if you don’t plan on selling it for another year or 2, you’ll know who the good agents are if they’re happy to help you now for a sale in the future and not a quick payday.

Open Floor Concept or Add Another Bathroom?

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