How much is an extra bathroom worth?

[Alex Verdugo]

I'm looking through the MLS and find this duplex. Looks nice and in a decent B-class neighborhood. There has been some rehabbing, floors, walls, etc. throughout both units. Both sides have 2 beds but one side is one bath and the other has 2. The 2 bath has 70s style tile in each bathroom around the tub, shower, and sinks. The single bathroom unit has an updated bathroom. Other than the bathroom situation, both sides seem to be recently remodeled. The 2 baths are listed at $1000 rent and the single bath is $800. Also, the 2 bath is 1200 sqft and the single is 850sqft.

So how much is an extra bathroom worth?

 I'm sure that having a modern bath is nice but is having two slightly less updated baths really worth an extra $200?  (The shower in one of the bathrooms has the classic replaced tiles with a completely different color patchwork.)

[Erik W.]

It's amazing what people will pay for....  that said, I don't think there's a hard and fast rule for what something is "worth".  A wise investor taught me once: "I don't need EVERYONE to pay $X for this unit, I just need ONE person who will pay $X". 

So for a single person, an extra bath is nice but not necessary.  They won't pay much, if any extra for it.

For a family of 4-5....almost a necessity!  They will jump on it and pay top dollar.

The bottom line there is "market rent" is a variable concept. Both the units you looked at might have been above or below market. Scope your market for comparable units and average out the top 5.  Then you'll know what people are paying for various amenities.  Also, be sure you target your marketing toward the kinds of tenants you want.  Notice: I didn't say use discriminatory advertising practices, but be sure to post your ads in places frequently visited (online or in person) by the kinds of folks you want who will pay top dollar for you unit.