3 bedroom vs. 4 bedroom resale value: What Is The Difference?

To take advantage of additional square footage, you may be considering stealing space from a fourth bedroom in your home. Alternatively, you might be thinking of adding a fourth bedroom to your home to increase its value.

In terms of home value, what is the difference between a three-bedroom and a four-bedroom home with the same square footage? Laura Abramson, a Keller Williams agent, found that reducing a four-bedroom home to a three-bedroom home has little effect on the home’s value if it is on the smaller side. However, there is a threshold in home size where a fourth bedroom can provide a premium.

Ultimately, the value of a home with three bedrooms versus one with four bedrooms depends on the square footage and how the additional space is used. For example, buyers may see a lot of value in a larger master bedroom or a second-floor laundry room, while they may not see much value in converting the fourth bedroom into a custom closet if there was already adequate closet space.

Let’s delve deeper into the differences in value between three-bedroom and four-bedroom homes and explore how much value an additional bedroom can bring to a home overall.

How Much Value Does An Extra Bedroom Add?

When flipping a property, many investors add extra bedrooms to the house, depending on the property size and budget. But why do they do this, and is it a wise investment?

According to real estate experts, adding a bedroom to a house can increase its value by up to 15%, which can significantly affect the final selling price. For every additional bedroom added to a property, the homeowner or investor may see the value increase by anywhere between $30,000 to $50,000.

Although experts estimate the potential value increase, it ultimately depends on the local real estate market, making it difficult to provide a universal answer. It is best to speak with a reputable local real estate agent to determine the actual value increase for an additional bedroom. Before deciding to add an extra bedroom, there are some factors to consider.

Consider the Location

The location of your house plays a significant role in determining if investing in an extra bedroom is worthwhile. By understanding the preferences of potential buyers in your vicinity, you can make a more informed decision regarding this matter.

In several instances, building a storage area or a home office is a more viable and cost-effective alternative than adding another bedroom. This approach can create additional space in the bedrooms, providing the entire house with a more open and uncluttered ambiance while requiring fewer resources in terms of finances and labor.

Loft Bedroom Conversion

Many homeowners attempt to increase the value of their homes by converting spare spaces into bedrooms, but this strategy can be hit-or-miss. While some people may appreciate a basement bedroom, others may not find it valuable. On the other hand, converting your home’s attic or loft is generally a great way to add an extra bedroom.

Depending on your home’s design, converting a loft into a bedroom could be as simple as installing a staircase or as complex as rebuilding walls. The most crucial factor in this type of conversion is ensuring that the ceiling height is adequate for a livable space. An attic is usually a practical bedroom area, provided that it’s easily accessible via a permanent set of stairs and that you can stand up inside.

The cost of converting a loft or attic into a bedroom varies depending on factors such as location, project scope, and real estate market conditions. However, it generally falls somewhere between $12,000 and $50,000, making it a more cost-effective option than building a bedroom from scratch, which can cost $57,000 or more.

A quick tip to keep in mind is that a renovation project like this typically requires licenses, permits, and approvals from local building codes and homeowner associations. Failing to obtain the necessary permits could result in the loft or attic space not being classified as a bedroom, rendering your efforts useless.

Bumping Out

  1. Adding a bump-out involves attaching extra space onto the side of a house to create more room for a bedroom as part of a home addition. Typically, both the foundation and the roof can be extended to accommodate this type of addition. With careful planning and execution, bump-outs can blend seamlessly into the existing structure, resulting in an additional bedroom that adds value to your home.
  2. When a home addition is a bump-out, an extension is added to the side of the house to create additional space for a bedroom. In most cases, both the foundation and the roof can be extended to accommodate the bump-out. Well-planned bump-outs can appear natural and add an extra bedroom to your home, which can increase its value.

Three-Bedroom vs. Four-Bedroom Home Value

The number of bedrooms in a home does not always determine its selling price. A higher number of bedrooms does not necessarily mean a higher property value. The size and usage of square footage are critical factors in determining the value of a three-bedroom home versus a four-bedroom home.

A three-bedroom home might have a more spacious living room or a larger master suite, making it equally attractive to potential buyers and giving it an edge over a four-bedroom home.

Although a four-bedroom home may appear more valuable than a three-bedroom home, the actual value depends on how the square footage is used. For example, a three-bedroom home may have a more significant living room or a larger master suite, increasing its attractiveness to buyers and giving it a competitive edge over a four-bedroom home.

A comparison of average sales prices for 3-bedroom versus 4-bedroom homes in Livingston County, Michigan, based on size, is presented in the following charts to provide a more accurate analysis.

Homes in 1,200 to 1,499 Square Foot Range

Homes in 1,500 to $1,749 Square Foot Range

Homes in 1,750 to 1,999 Square Foot Range

Homes in 2,000 to 2,199 Square Foot Range

Homes in 2,200 to 2,399 Square Foot Range

Homes in 2,400 to 2,599 Square Foot Range

Homes in 2,600 to 2,799 Square Foot Range

Homes in 2,800 to 2,999 Square Foot Range

Homes 3,000+ Square Feet

Additional Considerations

Once again, there is no one definitive answer to whether an additional bedroom will increase the value of your home. Here are some more factors to consider before embarking on a home improvement project:

  • More is often better. Generally, homes with more bedrooms are more valuable because they are more attractive to potential buyers.
  • Each additional bedroom adds less value. However, the added value of an additional bedroom typically decreases with each additional bedroom. This means that the difference in value between a one-bedroom and a two-bedroom home is usually more significant than the difference in value between a three-bedroom and a four-bedroom home.
  • Home layout. As demonstrated by the charts above, it’s not unusual for a three-bedroom home to sell for the same price as a four-bedroom home because of the layout of the house. For instance, consider a 1400 square foot three-bedroom home and a four-bedroom home with the same square footage. Even though one house has more bedrooms, the three-bedroom home could have a larger living room or feel more spacious overall.

Before embarking on a project to add an extra bedroom or convert an existing one into something else, it’s advisable to seek advice from a knowledgeable real estate agent. This is especially important if your home is already small because adding another bedroom could result in cramped and unappealing spaces that might turn off potential buyers.

Furnishing a 3-bedroom house can be quite costly. In contrast, downsizing a small 4-bedroom house to a 3-bedroom could significantly improve the available space and make the home more desirable to buyers.

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