@Stephanie P. Thanks for this reply — my head is in a similar space (is this worth it). The only factor that I should clarify is that I would use cash on hand to add that additional bedroom (and remove an undesirable tenant), which I hope would add something to that valuation — I've read the 11% range is not unreasonable (*please comment on this, anyone who's done this before). Assuming the bedroom pushes up the value a bit, the math then looks like a $230K value, minus 30%, leaves me at $161K, and taking out my additional equity would put about $26K in hand for my next purchase.
The extra bedroom would easily net me another $3600 / year, so I'm thinking about doing it anyways & optimizing the rents. My risks are project overage costs, and getting an appraiser to see things in a good light following the minor renovation, but again, this project would pay for itself pretty quickly anyways, so it seems like a good idea at this point. If the appraisal didn't go my way, I would have a more valuable building pulling in more money every month, and (hopefully), a tenant who doesn't park on the lawn & smoke.
