As an retired appraiser, I am loath to ever advise the loss of a functioning bathroom. It will usually result in a loss of valuation. If the subject home had five baths, it would be a very different answer. The extra baths would be redundant. It is typical that more buyers want three bedrooms and two baths than two bedrooms and 1.5 baths and are willing to pay for the extra utility more bedrooms and baths offer.
When I read your description of the issue my first thought was the loss of the downstairs bathroom is probably not a big deal. Then I looked at your floorplan. Now, I'm not so certain.
Two things come to mind, will this house be a candidate for tear down? It is at the beach. Are there a lot of teardowns nearby? If there are teardowns and new construction, it really doesn't matter what you do. The buyer will only want the lot.
If it is likely that a new buyer will not tear the house down, I would advise against the loss of the 3/4 bathroom. With very little effort and minimal cost, your downstairs floor plan can be adapted to incorporate a downstairs bedroom. The addition of the downstairs bedroom with bath would place the home in an entirely different category of buyer. Downstairs bedrooms are very attractive to buyers because they can accommodate older guests and provide greater flexibility. Getting that third bedroom with adjacent bath would provide for the highest and best use. That's appraiser speak for more money.
There are many ways ways to adjust the floorplan to incorporate both the need for a better laundry space, better living area, kitchen update and even another bedroom. You should post in the Building a Home Forum with a scale drawing showing measurements of the downstairs and ask for floorplan ideas. If you know the load bearing walls, that would be helpful to the discussion. Mark all the entries, doors and windows. You might be surprised about the answers. The Kitchen Forum can provide you with some ideas about your pending kitchen/bath renovation, too.
This is what I would advise. Contact one or two experienced realtors about the local market and the prices between 2 bedroom 1.5 homes and 3 bedroom 2 bath homes. Tell them that you are not selling this week. But, you plan to sell in two to three years and want their input before you renovate. Be sure to ask more than one for their opinion. They will want to provide you with this information because they might get the listing when you are ready to sell in a few years. They will hope to build a future relationship. It will cost you nothing.
Good luck with your decision.
Q
