Extra bedroom but only one(smaller) living area ???

Hi all.

As some would know i have a property that i am trying to increase the yield on. Selling was an option but ive decided to stick with it due to its location. Its in a regional city CBD and only a short stroll to clubs,cafes,shops,transport etc. It was an original 1 bed home that recieved a massive renovation( new roof,restumped,rewired and extended.) It is now a bit of a trendy inner town pad.

Now problem is its still only a 2 bedder that is currently rented for $265 per week. Now 3 bedders rent for $270 up to around $320 for similar quality properties as mine.

I played with a few ideas but the cheapest option may be the best. This property has a single living area that is a very large 8m by 5m..Now i could very easily section this off creating a 3 by 5 bedroom and leave a still decent sized 5 by 5 living room.

So in a nut shell i should be able to create a third bedroom for well under $1,000 and i should increase rent to around $320 or a $55 per week increas.

So would you do this even though it cuts the one living room down in size ?

Extending to include a second living room is a option but cost/return sums dont make it a standout option.

Sorry for long post but your input would be greatly appreciated.

Yes, do it.

More rent now + down the track a 3brm is worth more than a 2brm as far as revals & refinances are concerned.

Yeah i think i will.It should only take one day to complete.
From a personal point of view i would want a bigger living space or two spaces but rentals in the CBD area are in very high demand.And im not living there.