I own a 3/2 condo unit in Midtown Atlanta. Currently it has two small bedrooms that share a bath, as well as a largish master bedroom with a bath of its own. The unit also has a massive combined living room/kitchen space that is accessible to everybody.
If I were to build a single new interior wall and install a door in it, then - poof - most of that spacious living room would instantly become a fourth bedroom, and quite a large one at that. It would have broad windows, an excellent view, and a big private 12th floor balcony.
Doing this would greatly reduce the common space. Still, there would actually still be enough footage left for a common area nook with a couch, book shelf, and side table - maybe even a TV that swings down from the ceiling. Now, though, the kitchen and remaining common area would have NO windows instead of its former great view. And now no one else could get to the balcony, except by going through the new bedroom. Lastly, this puts 3 bedrooms instead of 2 sharing a single bath. (However, I could fix that last bit by turning some closet space into a narrow hallway that would make the master bath accessible to everyone.)
What I'm mainly wondering is the following: Would this change be likely to increase my rental income from the unit? And can you suggest any ballpark figure on how much? For context, my HOA requires me to rent out the unit as a whole for at least 12 months at a time, so no renting room to room, and Rentometer tells me the median rent for a 3/1.5+ condo in my area is $3000. Also worth considering is that it's on the same block as MARTA (Atlanta's subway/rail system) and just 2 blocks and one interstate bridge from GA Tech. It's an overwhelmingly 'young professionals and college kids' area of town (like 99.7% according to neighborhood scout; kids? what are those?).
So my main question is whether I can increase rent (and by how much) by turning this 3/2 into a 4/2 by cannabalizing the living room, deck, and kitchen view into a new large bedroom. I'd also love to hear any general thoughts on whether this is a good idea, or things to keep in mind while going about it.
Thanks for considering!
It sounds like changing it to a 4/2 will result in a very quirky layout. Who is your target demographic for renters? If it is students or young professionals, how much can you average per bed in your area? If your demographic is going to be a family, I think the quirky layout will make it far more difficult to rent.
Definitely students and young professionals. Family rentals are very rare in this neighborhood.
I'm familiar with how to estimate rent for an entire unit (assuming it's 3 bedrooms or less), but what would you suggest for getting average rent per bed? I suppose I could divide the rent for a 3 bedroom unit by 3, and then assume a little less. Do you know a better approach?
What about the second bath? Will that be accessible without going through this new bedroom?
Try calling a local property manager that focuses on student rentals and ask what their rent per room averages. If they have a decent web presence, you can probably get a good idea of a per-bedroom rate right from their website.
@John Delano The 2nd bathroom will remain accessible to everyone. However, with or without the new room, the master bath is accessible only to the master bedroom. So unless I carve through some closet space to draw a new narrow hallway to the master bath, we’d have three bedrooms on one bathroom and one bedroom (the master) on the remaining.
@Mason Hickman That makes sense. Supposing I get the average rent per room this way, I could either just multiply by 4 to estimate rent for the 4/2 condo, or I could subtract some on the assumption that the average student bedroom rents for more than each of mine will. (Mine are large and have good views, but most bedrooms have access to a living room - mine won’t - and enjoy a higher ratio of bathrooms to bedrooms. So I’m assuming each of mine will rent for less.) Any thought as to how to approach that calculation?
I’ve got three garages converted into a fourth bedroom. I get an extra $100/month out of it. Not great, but not bad.
@John Morgan A $100 month is enough to matter on my scale. With that said, it wouldn’t be worth it to me if I had to spend $1500 refurbishing the garage. Have you found that having an extra bedroom makes it harder to find tenants who want to rent out the whole place?
@Richard Davis In my area, 4 bedroom homes in blue collar hoods are rare. I could probably get an extra $150 or $200/month now with that extra bedroom. Almost all my 4 bedrooms have an additional family member or friend living in them. By them being able to split the rent with two or three household incomes, they aren’t house poor and take good care of my properties. 4 bedrooms are in MAJOR demand near me. All these older homes only have 2 or 3 bedroom homes, so my 4 bedrooms rent out in a nano second. And they don’t care if they’re sleeping in the garage!