Forced Appreciation - Single Family - House Hack

[Victoria Radcliff]

I am looking to do a house hack and I am finding a lot of 2 bedroom homes in my area. In Pittsburgh you can only have 3 people in a home that are not related. So I can't look for a 4 bedroom single family home. With a 2 bedroom home with an unfinished basement would you consider making it into a 3rd room to force appreciation? Water is very common and makes me nervous if it is not don't proper and could get pricey quickly. Is this a good idea or should it be avoided and if so why?