Even if the square footage is there to do it.This plan you are looking at for instance.

if you really want to target a search you can look for 2 bedrooms with large square footage, suggesting that the could probably be turned into 3 bedrooms without too much trouble but will be priced as a 2 bedroom. 

Also, did I read correctly that your neighbor's house is smaller than yours in square footage, but has an additional bedroom and bath?

Just going to share yet another ironic observation of mine:To reply, (as the owner of a rental property) having a 3D Virtual Tour with Professional Floor Plans does many things all for the price of one media package:3D Virtual Tours can dramatically increase the efficiency of property management in many ways.For rentals, the marketing media is entirely recyclable.Unlike a home for sale, the same virtual tour, images, and floor plans can be used once a tenant moves out;remote access to information about a property without having to visit the locationtours can be tailored (with tags and image tags) to meet the needs of rental properties, including detailed information about various "hidden" facts, like circut breaker panels & details,  installed appliance details, documented feature conditions (flooring, windows, carpets, walls, lighting fixtures, etc), and more.our tours include an "On-Screen Measurement Tool" that can be used remotely to measure aspects of property elements remotely;Used as an initial step in the SHOWING process:manager can easily SHOW a currently occupied property online without the need to schedule with an existing tennant;can save the manager valuable time if the home doesn't meet the prospects' needs;gives the prospect more information about a rental than still photos;if a prospect reviews the virtual tour and is still interested, you have a more serious prospect;As-Is Property Documentation can be used as evidence in rental conflicts or litigations, especially when it comes to damaged property;We also offer Construction Snapshot Views for rehabs or new construction; the ability for a property manager or contractor to review what is behind the drywall can be critical to making repairs or modifications;Laser-Accurate Measurements, Square Footage calculations, and Professionally Drafted Floor PlansMore than sufficient evidence if you are challenged with a SqFt dispute;Floor Plans make it easier to rent a home because it makes it easier for the prospect to make a decision;As-Built Floor Plans and Measurements are invaluable to any contractor and construction project;Tours can be assembled into a Catalog, essentially giving you a portfolio of properties to present for various reasons;There are more benefits than I can imagine. 

You can approach the negotiation from 2 logical ways-1. price per sq/ft - and reflect new sq ft to get to price2. look up recent comps for the square footage that houses sold (i.e. your appraisal will have this).

@Tony KimDoesn’t look like they added any square footage when looking at the old listing , Would be interesting to see what they sell it for .

Here they calculate all below ground square footage separate from above ground sf regardless of whether it has the proper egress or if it is finished.

SFR's closer to downtown will tend to be older homes as compared to the newer developments with more square footage and amenities up north in Cedar Park, Round Rock and now as far as Georgetown. 

Or you can force appreciation by adding square footage or rooms to meet the rule.

There have been quite a bit of posts on here about "house hacking" so I am curious to hear from those who have tried "office hacking"...Much of the financing for commercial investments has restrictions on owner occupancy however, in an office building or complex where there is plenty of square footage to essentially "office hack", I would think that opportunity would be present - where you would occupy less than 50% of the space.