Making a small living room even smaller?

[Lucas Duce]

I am currently analyzing a potential duplex for purchase and I had a quick question about adding an extra bedroom and the extra rent that doing so could generate. One of the units is a 2bd/1bath with an interesting layout and is rented for $600 per month. The unit is approximately 480 square feet. It has two official bedrooms, but then there is a medium sized "living room" with a dividing wall in the middle with a larger than normal door frame just without the door. This extra extension of the living room has it's own closet and everything. The simple addition of a door would allow it to meet the requirements to be classified as a bedroom. The current tenant is already using it as an unofficial spare bedroom anyways. It is an open concept kitchen/living room area, so officially dividing it wouldn't make the new small living room unbearably cramped. If divided, the 3 bedrooms and living room would all be approximately the same size.

My question is, if I go ahead with creating the extra 3rd bedroom, can I expect to be able to get the rental increase that comes from the difference of a 2 bedroom unit compared to a 3 bedroom unit? My hesitation is that the monetary rental difference that is reflected in rentometer between 2 bd and 3 bd units is likely also due to the increase in square footage between the two. Would creating this 3rd bedroom increase the rent I could charge even if it means making an already small living room even smaller? Has anyone experienced any drawbacks from having a small living room in their rental? Any input or advice is greatly appreciated, and thanks in advance!

- Lucas Duce