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Adding a bedroom
Adding a bedroom is a common strategy to both add value to a property and increase the rental income of a property.
The essence of the strategy is to identify a property that can be easily modified to have an additional bedroom. For example, in properties with L shaped lounges, often the lounge can be easily cut into two rooms, one remaining the lounge, the other becoming a new bedroom.
Ideally this is done in a way that doesn't require structural changes and in an inexpensive fashion. However, occasionally a grand revision of a property can maximise it's potential and should at least be considered.
The potential benefits include increased value since people are willing to pay more for houses with more bedrooms and increased rental return since houses with more bedrooms command a higher rent.
Considerations
Renovations of this sort need to be carefully planned. In particular, natural light must be considered. Will the changes make a room too dark? Likewise, will the flow of the house remain natural? If the renovation ends up with a bedroom coming off the kitchen that will seem decidedly odd. Finally, will it be possible to make the renovation consistent with the overall style of the property?
As with any renovation, there are legal considerations that need to be taken into account. If structural changes are required, this will require a building consent from the local council.
There is a diminishing return to this strategy, beyond turning a two bedroom house into a three bedroom house. The majority of the rental and property market is looking for a 3 bedroom house. So turning a three bedroom house into a four bedroom house doesn't increase the rent or the value by the same amount as turning a two bedroom house into a three bedroom house.
Risks
There is a possibility of decreasing the value of the property if the modification is done poorly. This may include poor lighting, too small a room, an odd flow or being entirely inconsistent with the character of the existing house.
