Add a Bed or Add a Bath?

[Sarah Miksa]

I just bought my first investment, a condo in the heart of Lincoln Park Chicago. It is a huge 1/1 with 2 private outdoor spaces near safe public transit/depaul university. I am exploring two options as a new investor. The first option is to add a full bath (around 40-45k) and then house hack the front as a short term rental and live in the back half of the unit. Alternatively, there is space to add a second bedroom. I could add another bed and then move out into a cheaper apartment and rent out as a 2/1 short term rental. The short term rentals rates are at a premium in this location and I am trying to determine the best investment option as someone new looking to renovate with the above options and rent either half or all of the unit. Thanks in advance!