Investor · Roebling, NJ · Member since 2016 · 55 posts · 39 votes
I have a brrrr i am current in the rehab stage on and need some advice.
The house is on paper a 3bd 1 ba row home. in an area where within the 2 neighboring streets all of the home layouts are exactly the same. nice solid brick construction row homes of same size and layouts.
heres my problem... one of the bedrooms and the only bathroom extremely small. a I am seriously considering enlarging the bathroom into the small bedroom to have a normalish size bathroom and a hall closet in exchange for the tiny bedroom.
The tiny bedroom is so small that the township considers these houses 2 bd units and therefore only allows 4 people to occupy them but when the home values are appraised they are appraised as 3bd homes. so this means the appraisal for the refinance part of the brrrr may come in too low if i move forward with this plan.
of course on the other hand the tiny bedroom is wasted space that nobody will occupy. prospective tenants who need 3 bedrooms will not apply and my time showing this unit to them will be a waste.
i do plan to hold this house for at least 10 years. so i am leaning toward doing this in an effort to make it easier to rent and keep tenants.
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
8y
During your due dilligence, did you see the recent sold prices (comps) of these neighboring homes? If they have the same layout and kept the small bedroom/bathroom, you probably should not dump a bunch of extra money into changing the layout.
If you make it a 2-bedroom home, it'll be appraised as such (regardless of how your township views it), and you could end up not getting a lot (or any) money out of this when you refinance.
What do the nearby rental ads look like? Do they keep the same layout? You can always paint in light colors to make it feel bigger.
I think the answer is you need to compare to your neighbors. Unfortunately this should have ideally been figured out before you purchased the property.
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
8y
I would say probably not when it comes to making a 3 bed into a 2 bed. Now if it was a 4 bed and you would be making it into a 3 bed, I would say that likely makes sense. 3 bedroom homes seem to be the smallest that families will consider and is usually what homeowners want.