At the end of the day, properties are homes. If you are an investor or developer, your property portfolio may contain plenty of homes that you don't live in - but someone does, and therefore the property has to meet the needs of the people living in it.

One question that is regularly posed at properties that I visit during my filming of Homes Under The Hammer is whether a property will become more valuable if an extra bedroom is added. Would that extra bedroom make the property more suitable and 'liveable' or is it not worth the expense to do. Because of the nature of auction properties, many that I visit have not seen any kind of renovation or re-arrangement work for many, many years, if ever - and in trying to modernise these properties to suit today's home dwellers, the matter of 'How many bedrooms' is an important consideration.

If I use a terraced property that I visited recently as an example, it will serve to illustrate the point. THis was a 2 bedroom mid-terrace property in a popular residential / letting area. It begged for extensive modernisation since the accommodation at the time of sale comprised 2 bedrooms (upstairs) but the bathroom was downstairs.

For me, the obvious drawback of the property was the position of the bathroom - downstairs next to the kitchen. Most people,myself included, would prefer to see the bathroom moved upstairs - but this would mean potentially loosing one of the bedrooms unless we could modify the property sufficiently to allow for the bathroom to be relocated and yet still retain the 2nd upstairs bedroom.

So where to put the additional bedroom?

There are various possibilities for the location of an additional bedroom:

1. Loft conversion - Going 'up in the world' is very popular and research suggests can add significant value to a property, particularly in areas where space is limited and demand is high e.g. London

2. Extension - If you have the space and can get Planning Permission, an extension to the property might be the best solution to incorporating another bedroom. This could be an extension above and existing adjoining garage or a full double height extension which would add another room to the downstairs of the property as well.

Is it worth the cost in terms of added value to a property?

Research carried out by the Nationwide indicates that that converting existing space into an extra bedroom in a mid-size 2 bed semi-detached property adds around 4% to the overall value of the property.

However, if the size of the property also increased because of the extra bedroom, (i.e. an extension is added) then the extra room could increase the property price by around 11%. In other words,
adding an extra bedroom to the average 2-bedroom semi-detached will pay for itself as long as the work doesn't exceed 10% of the original value of the property. So, in my example where the property was valued at a fairly average £120,000, adding an extension to solve the additional bedroom dilemma would be worth it provided that the extension didn't cost more than £12-£13,000.

Below is  table that illustrates the change in price resulting from adding an extra bedroom to a property throughconverting existing space and by adding extra floor space to a property.

 Source: Nationwide

The table above gives the regional picture, showing both the change in price from converting an existing room into an extra bedroom and also the extra benefit from increasing the size of the property to add the extra room. As expected,  the premium for merely adding an extra bedroom is smaller. This is because people value good-sized rooms.

For more information on this topic, please visit the site store to order your SIGNED copy of Martin's book, 'Teach Yourself: Making Money From Property' available for just £9.99 plus P+P.

Alternatively join me and my team on one of my Special 3 day Property Training Weekends, when we'll teach you what you need to know to become successful as a property investor or developer - and help you avoid costly mistakes.