Investors- Should You Buy a 4-Bedroom or 3-Bedroom with Bonus Room?

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Real Estate Agent with Realty One Group RB14038403

When you are thinking about a single-family home to buy as an investor, should you buy a 4-bedroom house, or a 3-bedroom house that has a bonus room? Obviously, the more bedrooms your house has to offer, the more appealing it will be to more renters.

I took a look at three areas, Brownsburg, Avon and Pike Township in Indianapolis to see if anything stuck out about homes for sale.* What I found was interesting. In Brownsburg, 3-bedroom homes now on the market which have an extra room are listings for an average of $149,028. 4-bedroom homes average $170,756. The average square footage difference is only 5 sf.

Interestingly, in Avon 3-BR + bonus are listed for $156,010 and 4-BR are at $151,425. Similarly, in Pike Township, 3-BR + Bonus average $140,790 and 4-BR average $130,679. In both cases, the 3-bedroom homes sf average is within 100 sf of 4-bedroom homes.

So, at least at this time, what kind of house you might target depends upon the area. In Brownsburg, you might look at 3-bedroom homes with bonus areas that you add a closet to, wall in, etc. There’s a $20,000 difference between those and 4-bedroom homes, so that could be money well-spent. In Avon and Pike, you might simply go with the 4-bedroom homes since they seem to be a better bargain.

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*Assumptions: 2-car attached garage, no basement, up to 1/2 acre. Bonus areas include bonus room, exercise room, den/library, loft, office, rec/play room.

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