$10k for Master Bath Addition--Wishful Thinking?

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Old 06-11-14, 12:45 PM
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$10k for Master Bath Addition--Wishful Thinking?

I'm considering adding a master bathroom to my single-story rental property to make it more enticing. Most of the homes on the market in the area have at least two bathrooms and the house could really use another bathroom to attract tenants. I feel my audience is severely limited by the home only having one (small) bathroom in the hall. I would only need to contract out the exterior work (block foundation, framing, roof, siding) and I would be doing all the interior work (electrical, plumbing, insulation, drywall, etc). I estimate the size of the addition to be about 50-75 sq ft. Is $10k for this addition wishful thinking?
 
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Old 06-11-14, 01:38 PM
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In my area the number of bedrooms is a larger factor than bathrooms though higher quality tenants do notice extra bathrooms more. How much do you think you could raise the rent with the extra bathroom? Without knowing your age or long term plans for the property or your time living in that part of the country I have a hard time saying how much to invest. I'm looking more at a 3 year max payback period and feel better with 2 years when doing an upgrade like that. But, I'm able to do all my own work so that skews my costs to the lower end.

When adding a bathroom I do not expand the foot print of the home. Doing so always drives the cost considerably higher than I want. If the house can take it I will add the bath within the current structure by converting a closet, blocking off the end of a hallway or using the end of a large room. 3/4 baths gain nearly as much rental value as a full bath and can be more easily fit into existing spaces. Still, you have to be open the the idea that some houses simply are not good candidates for a bath addition and you make what you can with what you've got.
 
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Old 06-11-14, 03:11 PM
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My intention is not to raise the rent, but to make the home more attractive to prospective renters. A lot of comparable homes in the area have at least two baths and are charging about the same. The reason I've been able to get away with charging the same for my one bath is the home is nicer and the location is more desirable. The home is only 1000 sq ft and there is no viable way of using any existing space to convert to a bathroom. Small rooms, small closets, no dead space. I could kill a bedroom and have a two bedroom two bathroom house I suppose, but I really don't want to do that. I suppose another alternative would be to gut the existing hall bath (adjacent to master), convert it to living space, then create a Jack-and-Jill bathroom between the master and the hall. The bathroom is outdated and needs to be gutted anyhow Things would be really tight though. I'd have to draw it up and see what it looks like. The current bathroom is adjacent to the master, so I could simply cut a door and make it a Jack and Jill, but I would still have a pretty small bathroom.

I'm 36 years old and plan on keeping the home as an investment indefinitely.
 
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Old 06-11-14, 04:21 PM
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I have a hard time believing you're going to add on a bathroom for $10K.

Have you had any contractors out to get a feel for their price?
 
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Old 06-11-14, 04:22 PM
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So, now you have a 1'000 sq/ft 3br 1 bath home. At that size a single bath is pretty common. Adding square footage or converting a room into a bath is something I would not consider on a house that size especially if you won't be able to charge more for it.
 
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Old 06-12-14, 07:56 AM
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I didn't say I wouldn't be able to charge more for it, I said that isn't my intention. It's been listed for nearly a month and their hasn't been much interest when historically I've gotten several calls within a week or so. It is priced right based on comps in the area. Hopefully things will pick up in the next month or so once people start getting serious about moving.
 
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Old 06-12-14, 08:23 AM
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I would not sweat the no calls. My rental properties go through some crazy spurts. There will be a period where nobody calls. Then once you have everything rented out the phone will ring off the hook. One month everyone will want cheap 2br then next month people want big 3 or 4br houses. Typically for me things are slow in the spring before the kids get out of school then everyone plays musical houses moving around. Then things get quiet through mid summer and the phone rings like crazy at the end of summer before the kids go back to school. Now is also still a hard time for lower income people as they continue paying down this winter's utility bills.

It's all about the money. If you make $50 a month profit now then spending $10k to add a bathroom you have to really think hard about how that $10k will get put back in your pocket plus interest and inflation. You also need to consider the value of the home. If it's a $50k house then a $10k addition is hard to swallow and you might be better off selling that house and putting the money into another home that has the size and bathrooms you want.
 
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Old 06-12-14, 04:47 PM
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You're right. I'm just impatient and anxious to get some new tenants in there. Current market value of home is about $200k.
 
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Old 06-13-14, 05:57 AM
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That does change things a bit. If you can increase the home's value that will help offset some of the new bathroom's cost. You probably won't see the full cost benefit reflected in the home's value immediately but over time it should. If you can increase the rent that also helps. Then if the extra bath allows you to get and keep a better quality tenant there is additional benefit there in reduced wear & tear and the potential for a longer term, reliable income stream.
 
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Old 06-13-14, 04:33 PM
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I think mossman is looking at the added value of the reduced vacancy rate and that can be significant: We lowered our rents several years ago after we had a couple units stay open all winter. The vacancy rate for the next two years was under 1% and we'd never had so much cash coming in on them.

I think there's merit in the project, just not sure the budget is going to be sufficient.
 
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Old 06-13-14, 05:50 PM
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Just for perspective, and not adding anything to the conversation about market value, I'm starting a master bathroom "renovation" next month and the Materials estimate alone is $9K. Understand that this is a higher end reno with Granite counters and custom shower with frameless doors, shadow box features built in, a retile of the jacuzzi, lots of glass tile, etc, and by no means a simple job. I just felt that no one has put in perspective the original request for a $10K budget other than might not be sufficient.

I sometimes forget that a homeowner can pull his own permit and do his own work. If it was me, a permit states that I have to have a licensed plumber do the work, licensed electrician do the wiring, etc. which drives up the cost. Fortunately, where permits are not required, I can save the homeowner some money by performing those tasks myself. Anyway, be wary of your budget, and make sure that you are not stretching yourself too thin should your budget not meet with reality.
 
 

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