Thoughts on adding an extra 1/2 bathroom

[Enrique Roth]

Hi everyone,

We're about to begin the rehab work in one of the properties we purchased in Old North Milwaukee. Our contractor mentioned that there's a possibility of adding an extra 1/2 a bathroom to the upstairs floor, turning the property into a 3br 1.5btr.

When we asked our agent his thoughts, he mentioned this wouldn't increase the ARV of the property much as we're already maximizing the ARV in the area.

Would love to hear from fellow investors in the area what your thoughts are here, not only from an ARV perspective but also by how much could it potentially increase the rent value.

Thank you so much! 

[Marcus Auerbach]

Nobody wants a 1 bathroom house, neither to rent nor to buy. They may accept it, but prefernce for buyers and renters is alsways a second bathroom. Especially if you have 3 bedrooms = up to 6 people.

It should cost about 5k, but you won't get much higher rent, simply because people in don't have it. You probably recoup the 5k in ARV, but Old North Milwaukee is an economically challenge neighborhood, so manage your expectations.

Avoiding frequent turnover, tenants who don't pay, damage property or cause other issues is the name of the game to achive long term profitability. Anything you can do to attract and keep better tenants will be worth it and if you rent to a family a second bathroom will be high on their list.

We always ad a second bathroom and finish at least part of the basement of ranch homes and based on my last 15 years I can tell you ARV or higher rent is not the primary reason we upgrade properties: better tenants, less turnover, shorter vacancies are worth it