Should I Convert Loft to a 3rd Bedroom

[Brian Pecyna]

I own a 2 bedroom, 2.5 bathroom townhouse in south Aurora IL near Naperville. I am currently having the kitchen rebuilt (insurance claim) and first floor flooring, and then it will officially be our first rental. The plan is to list it as a mid-term furnished rental (most likely on furnished finder).  Since purchasing in late 2021 I have had it in the back of my head to convert the upstairs loft which overlooks the living room into a 3rd bedroom. The loft is about the size of the other secondary bedroom and I have heard that adding bedrooms is one of the higher roi renovations. I have two questions: 

1. What are the best materials for a mid-tier rental? It is a nice townhouse but by no means luxury. I have heard LVP (luxury vinyl plank) for flooring and quarts countertops and full wood cabinets for kitchens?  Does this check out? I have a little under 30k as a budget. Looking for durability and aesthetics. 

2. Opinions on converting the loft to a 3rd bedroom? this would consist of knocking down some stair railing, putting up drywall, door, and building out a closet with the current square footage. Windows and outlets already appear adequate. Is it worth it?  I have yet to get a quote but from conversations appears to be a few grand. I am looking to hire out the project. This would also be the time to do it as it is currently vacant. Curious on if you'd typically need a permit/approval for such a project from the city? I know there are other townhouses with three bedrooms in the same hoa. 

Thanks in advance for any advice. 

[Kyle Ebersole]

Hey Brian, good questions! 

1. I like to install LVP and midlevel countertops and cabinets. For my market that looks like wood, soft close cabinets and granite countertops. They all meet the balance between durable, aesthetics and getting a good value on your work. 

2. I would 100% convert that loft to a 3rd bedroom. Going from 2-3 bedrooms are one of the biggest things you can do to increase ARV in a house. It'll up your rent and your ARV when you turn around and sell it. A couple grand will get you that third bedroom.