Permitting for adding more rooms without changing sq ft

[Jaskanwal Preet Singh Chhabra]

Hello, I am an investor in Austin, Tx. I am looking at a 4 bed 2.5 bath property in Pfugerville, TX that I am planning to rent out as a co-living space (rent by the room on Padsplit). I will be converting it into a 8 bed 3 bath property. However, in adding the bedrooms, no new sq.ft will be added. I will split a giant master room into two smaller rooms and will convert the living room to get the additional three rooms. I understand I will need to pull a permit to add shower area in the third bathroom but would a permit be required for the three additional rooms, especially given I will not be adding any new sq ft to the property? I am thinking more from the insurance and future liability stand point. If so, what will be the typical time and cost to pull the permit for such a project. Thank you!

[Zachary Deal]

One thing to keep in mind if you are doing this is that you are likely to create "functional obsolescence" which could mean you are not able to get a new loan against your property and it can be difficult to resell as well. Basically if there is no "living room" and there are no comparable properties with similar square footage and bed/bath count in your area the property becomes difficult to comp or sell and lenders will not be able to use it as collateral for a loan