Should I add a second story?

[Chris Scherr]

I’m buying my first rental that needs some work done before renting it out. It’s a small (just shy of 700 sq ft) 2bd/1ba that has layout that leaves a lot to be desired. There’s not a whole lot I can do to change the layout, except opening the kitchen to the living room, and cleaning up the 2 small rooms. That got me thinking.....

What if I add a second story onto the top of this to a) double the livable sq feet. B) turn it into a 3bd/2ba, therefore play to a much larger market both in rental and resell. I realize this is a huge project that would take much more capital than initially intended, but I was curious is anyone has approached this angle before. Pros, cons?