Working with a lot of investors, I often get asked whether adding an extra bedroom is worth it. On paper, it makes mathematical sense: more bedrooms often translate to a higher sales price or increased rental value. But before you go putting up framing for a new bedroom, there’s something important you need to consider—livable space.

Yes, a three-bedroom unit will generally rent for more than a two-bedroom. But you have to look beyond just the bedroom count. Square footage, layout, and functionality matter just as much—if not more. A three-bedroom unit squeezed into 1,000 square feet with one bathroom and three tiny bedrooms may not perform better than a spacious two-bedroom, two-bath unit with generous closets and well-sized rooms. The latter often attracts a more affluent or stable tenant pool because the space feels better and lives better.

When you walk into a property, it's not just about having a higher bedroom count—the space needs to make sense. If there’s no room for a sofa, the living room feels cramped, and one of the bedrooms barely fits a twin bed, are you really adding value? In fact, that can make the unit harder to rent. I speak on this from experience.

My first project was a major rehab where I had to fully reframe three units. I was proud of the improved functionality, but on the second and third floors, I tried to squeeze two bedrooms into small spaces. The result? A tiny "efficiency" two-bedroom with no real living or dining space. It was difficult to market because, while it had the bedroom count, it didn’t feel like a true two-bedroom. Couples or small families would walk in expecting more and leave disappointed.

Eventually, I decided to re-market the unit as a one-bedroom with a large living area—and everything changed. Interest spiked. The tenants who came could actually envision living there. They could see a proper living room, a comfortable setup, and the potential of the space. I didn’t reframe anything, but that shift in perception made all the difference.

And here’s the kicker—I didn’t make less money renting it as a one-bedroom. Because of the improved functionality and feel, I was able to command near market rates for a two-bedroom anyway. Why? Because tenants value layout and comfort just as much as the number of bedrooms. A well-designed one-bedroom can outperform a cramped two-bedroom any day of the week.

So when you’re considering adding a bedroom or reframing a unit, think about the overall livability. Is there enough closet space? Can someone comfortably put a sofa and watch TV? Is there room for a dining table? A crammed layout packed with bedrooms won’t attract quality tenants or buyers.

Bottom line: Functionality often beats bedroom count. Design with the end user in mind—not just the listing description.