Adding Value to Portfolio without Purchasing More Property

[Adam Hurst]

The market I am in, as with most markets right now, is a sellers market. It is growing difficult to acquire houses with numbers that make sense. I had a different idea that may apply to a few of my properties. Let me know what you think.

Property #1

Currently a 3 bed 2 bath in a campus neighborhood with 1700 Square Feet. I could convert this property to a four bed for under $2500(probably even less) by adding a wall, door and a closet to an extra space upstairs. It would put 2 bedrooms upstairs with a bathroom and still have 2 bedrooms downstairs with a bathroom plus a bonus room (loft) and an extra living area. Rentometer puts 3 beds in the area at the rent that I receive ($1425), but it puts 4 beds at $1650! Wouldn't make sense to invest $2000 - $2500 to get an additional 10% ROI?

Property #2

Currently a 3 bed 1 bath house that has 1300 square feet. There is a wasted area on the back of the house that could be converted into a master bathroom/closet. This one would cost a lot more to do and the gains are hard to measure. I know 3 bed/2 bath houses are more desirable but its hard to measure where my rent would go from the current $1125 I get now. It is a great location right on a park, next to a library, coffee shop and brewery. Has anyone added a bathroom to increase rents in a property?

Property #3

This one is my newest purchase. It is currently a 3 bed 1 bath with 1200 square feet of space. I will be asking $1250 as it is getting renovated on the inside. I will probably have to settle for $1195. It has a double car garage with the laundry in the garage. I am considering doing a conversion with one of the garages into an extra living space with a bathroom/laundry combo or another bedroom with a bathroom. Laundry would get pushed into a closet in the living room. Again, this would be an expensive project. Probably somewhere in the $15K - $20K range but it would be adding 200 square feet to the property, a possible bed room with bathroom and laundry that would no longer be accessible by going outside. Rentometer shows a 3 bed in this area at around $1100, but a 4 bed as high as $1450.

I have more but they are similar in nature. I just wanted to get some thoughts on these. I feel the first one is a no brainer, but the others are debatable. Thanks!