Running numbers when adding sq footage

[Katrina Razavi]

Hi BP fam! I recently bought a triplex in San Diego, each of the units are 1 bedrooms. That said, in the back of the property, we have some space to add sq footage and think we can squeeze in a bedroom and bathroom, turning one of the units into a 2BR/2BA! New construction is pretty expensive right now so I'm trying to run #'s to see if it makes sense. The way I'm running the #'s is by using a "purchase price" of the cost of building the expansion and the "rent" being the incremental increase we'd get by adding in the bed and bath. Too simplistic? Would love to hear from others how they'd calculate this. I'm debating-- is it worth adding on to the property or should I just use that cash as part of a DP to buy another investment property entirely....Would love your thoughts!