Los Angeles, CA · Member since 2015 · 61 posts · 15 votes
Hey BP,
I just purchased my first property here in Los Angeles. It's a duplex, and both units are 2-1, and around 1200 sq ft each. If I adjust the layout, I can add another small room. I was wondering what advice/experience anyone may have with this. My 3 options are: 1) add a 2nd bathroom 2) Add a 3rd bedroom 3) Leave it as is
Investor · Naperville, IL · Member since 2010 · 105 posts · 52 votes
8y
Agreeing with @Kate J. We have owned in NJ, MD and IL; and the requirements go down to the local taxing authority with what is considered a bedroom plus the building codes as to what is allowed as a bedroom (mostly egress requirements but always check).
I also want to throw in that the reason there's no great answer for this is because it REALLY is driven by the local market. If this is a 2-1 within walking distance of a train station or a high college population, then adding a bathroom might be the key to getting more income as you're likely to attract far more roommate situations (young adults, professionals, etc.) But if it's a family area or lower building class market, then the third bedroom might make more sense. You have to look at it in the context of the demand for the area. What you want to attract is only relevant within the confines of what the area demands (I'm sure there are people who know how to build demand, but I'm not one of them).
Once you know that, it becomes a matter of how much the options will cost vs. their expected payout/income increase. And for that you'll need to know what it's going to cost for each change and the amount of time it's going to eat up (and carrying costs) whether you do it yourself or you hire it out.
Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
8y
Add a bedroom. Much better ROI to have a 3 bedroom unit vs 2 instead adding a 2nd bathroom. Double check the rents on 2 bedrooms vs 3 bedrooms in your area to make sure it is a worthwhile investment.
Providence, RI · Member since 2016 · 73 posts · 36 votes
8y
Danny,
What are your intentions for this duplex? This is just my perspective, but if you are marketing this property to professionals a 3rd bedroom may increase the applicants with children. Of course, a 3rd BR may increase your potential cash flow. This is simply a personal decision on your part. I don’t know if there is a ‘right’ or ‘wrong ‘ answer.
Rental Property Investor · Austin, TX · Member since 2016 · 294 posts · 104 votes
8y
I added bedrooms already to 2 apartments. Yes, it makes better value. Btw, you would need to add closet in addition to the wall with door. In both of my apartments it costed 1000-1300 total for materials and labor. If you would do bathroom, it might go up to 10k, and the value will not increase much.
Los Angeles, CA · Member since 2015 · 61 posts · 15 votes
8y
Thanks @Kate J. - Oh, I didn't know that a closet was mandatory as well. This additional room is only about 8x10 feet. Do you know if there is a minimum room size requirement?
Thanks @Kate J. - Oh, I didn't know that a closet was mandatory as well. This additional room is only about 8x10 feet. Do you know if there is a minimum room size requirement?
it is mandatory in Illinois, in a sense that MLS will not allow to list it without a closet. I don't know about other states. I don't think the size is a requirement.
Investor · Naperville, IL · Member since 2010 · 105 posts · 52 votes
8y
Agreeing with @Kate J. We have owned in NJ, MD and IL; and the requirements go down to the local taxing authority with what is considered a bedroom plus the building codes as to what is allowed as a bedroom (mostly egress requirements but always check).
I also want to throw in that the reason there's no great answer for this is because it REALLY is driven by the local market. If this is a 2-1 within walking distance of a train station or a high college population, then adding a bathroom might be the key to getting more income as you're likely to attract far more roommate situations (young adults, professionals, etc.) But if it's a family area or lower building class market, then the third bedroom might make more sense. You have to look at it in the context of the demand for the area. What you want to attract is only relevant within the confines of what the area demands (I'm sure there are people who know how to build demand, but I'm not one of them).
Once you know that, it becomes a matter of how much the options will cost vs. their expected payout/income increase. And for that you'll need to know what it's going to cost for each change and the amount of time it's going to eat up (and carrying costs) whether you do it yourself or you hire it out.
Loveland, CO · Member since 2010 · 110 posts · 194 votes
8y
I'll expand my earlier answer. I'd add a 1/2 bath at minimum. In the small space you mentioned you could do that and maybe add an extra closet. I've done a couple where I added 1/2 baths and probably earned close to $15,000 on each of them. A lot depends on your construction skills and how easily you can expand the plumbing. One that I did sat about 4 feet off the ground and it was so easy to do that it probably cost me less than $100. IIRC the biggest expense was for the toilet mounting flange, the T-junction to tie into the pipe into the septic system and the new roof jack. I may have had to buy one length of PVC but between my excess stock and the pieces in the storage unit on the property I really just needed more PVC cement.
I bought a pedestal sink (discontinued model) at Lowes and a $2.00 toilet at my community wide yard sale.
I almost turned down a great deal on a 3/1 because it was on a slab and the concrete work and plumbing would have been a nightmare. Then a buddy told me about one that he was doing where he just added a "raised platform" in the room which allowed enough room to put most of the plumbing above the slab. Then he built a half-wall in the garage to carry all the drain lines through the garage, while keeping them hidden) to a point where it could be tied into the main drain. I did almost exactly the same thing. IIRC I paid about $400 to the plumber to do the final tie in. The rest cost me less than $1,200 to do the work myself.
Bought the unit for $110K, did that and did a layover of the roof, about $800 and added insulation in the attic. Sold the place about two months later, after some cosmetic interior paint for $165K. Not bad for a couple of weekends work.