We plan on modernizing the bathrooms and make it into a nice living space. 

 Are 1 bathroom houses common in that area.

We added value by renovating the property and adding additional features such as a 2nd bathroom and rear deck What was the outcome?

It is currently split between the neighbor and myself and only supposed to permit 2 bathroom per lot.

And in this area the trend I'm seeing for rental properties is:-LVP flooring-if countertops do need replaced, do cheap laminate that looks like granite or quartz-if there are tile backsplashes or on walls in bathrooms or kitchens, reglaze with porcelain enamel -if wood floors, refinish them to look new-get rid of old looking light fixtures and replace with brushed nickel-repaint the whole house including cabinets-get rid old old looking vanity tops.

Just bought duplex and one of the bathrooms need remodeling.

I expect your main issue with a second bathroom will not be cost, but space.  

It is a single family home with a walkout basement that has been finished to be used as a separate dwelling unit (has full kitchen, bathroom, & bedroom).To start, I will be living in the basement and renting out the main level.

I bought if for 230k with a 10% downpayment and after a 30k rehab (cosmetic rehab, add a bathroom and add 122 sq footage) Im ready to refinance, the apraisal will come around 300k or more. 

However the basement could be finished to add an additional bedroom and bathroom if needed.