Converting 3/2 to 4/2 in College Town

[Derek VanWinkle]

I bought a 3/2 home in a college town about a year ago and have been fixing it up while I'm living in it. I've also rented out 2 rooms to two friends during that time. The home currently has a formal living room, den, dining room, and large breakfast room. I'm thinking about making a bedroom out of one of those rooms to create more rental potential. 

Do you guys see an issue with 3 people sharing one bath? A lot of the older apartments around here are either 3/2 or 2/2. The newer apartments all have individual bathrooms, but run at a cost of $400-$550/room with a total sqft of about 1400-1500 for a 4 bedroom. I'm planning to rent out at $350/rm with a total sqft of 2200. 

I guess on a somewhat related note, do you find that college students would appreciate/value a larger home? 

Thanks!