It depends on how much it would cost to add the bathroom and what price the second bath would help you get when you sell. In the best situation I can think off, they would be about equal and the advantage would come in being to sell faster with the second bathroom.

Do you have a place within the house or would it be an addition to the house? I would at least have a plan and estimate. Some people just will not be able to see it on their own so a drawn plan would certainly help. The second bath would bring more attention to your listing but I also bet you would not realize the full amt. you put in. (Would you have some time to enjoy it?)

If you search on the web you will find "return on investment" charts that show how much a new bathroom, kitchen, deck, etc., will get you at resale. Just doing a quick search I found 60-85% on average. So it seems like it is highly unlikely that you would get your investment back.

Where specifically is the god spot to add the bathroom. Would it be a house addition, taking over a closet, basement, etc. That makes a big difference.

A friend of mine bought a house with one bath. It is just her and her husband, no kids. It is a 3 bedroom house, but one of the bedrooms in tiny. So people do buy 1 bath houses. She considered it a starter house but is having trouble getting him to consider moving.

Don't.
I have been for sale in Mt.Clemens for 5.5 months and we have gotten zero calls from the MLS listing. We had open houses every Sunday in the first five months (now C21 is selling the house and they'll do about one a month). I have had about 75 groups go through the house, most during my open houses, and most absolutely loved it.

Not an offer. Not a single offer. We are priced at $160,000 and it is a great family neighborhood (much better than the one we are in now, friendly-wise). We painted, repaired, refinished the floors, put new flooring on the stairs to the basement and garage, updated trim....We spent $6000 to make it look good enough to go with the $30,000 kitchen we did three years ago when we thought we would never move. I don't regret doing most of the work, but there are a few things that we could have skipped and saved money on. We had no idea that the extras would not help. We were going for WOW and we get it in the comments people make, but no offers.

The realtor has had the listing up for two weeks, and he has not received a single call, either. I asked him if he could see how many hits the MLS listing got and he is looking into it. Yes, we are a one bathroom house, too. But of the houses selling in my neighborhood, I don't think there are any variables like "has two baths, not one" that gets them sold. We have a completely empty, clean, and dry basemetn and it would be easy to add a bath there (and not easy anywhere else), so that is where most second baths go in my neighborhood. Looking at the listings, I am wondering if the realtors are fudging a bit when I see a house identical to mine with a bath and a half. The half is probably in the basemetn and can't be counted. But as my realtor said when he listed our house as a 4 bedroom when it is a three with a possible fourth (add a door and a closet), "It is only a $25 fine, I'll take the chance."

There are so few buyers out there that it just seems to be a total crap-shoot. Unless homes in your neighborhood are selling, I would not invest a whole lot beyond spiffing it up, decluttering, removing a third of the furniture, and making obvious repairs.

Well, I'm thinking about that too.
I think in a slow market people don't want to look at possibility of additions, they want it finished.

I found many articles saying 2 baths are very important. 1 article stated adding a bath can actually improve the value of your home from 10-19%! (http://www.renovationdesigngroup.com/learn/DesNews/06-09-08.asp)But it has to fit. You can't put it in the basement and expect it to work I think.
Most articles list a bath as recouping 80-90 % but it also might be the difference between selling and not.
Why does your agent think you're not getting offers? Is he selling any homes in the area?
On a personal note, I think if the house is 3 bedrooms with possible 4 I'd list it hat way. People come to look a he house expecting 4 bedrooms and then get disappointed. That's how I'd react. While if I saw a 3 br that may be 4 hat'd be great. Perhaps that's a reason no offers. People who look a the home want 4 full bedrooms.

I wouldn't buy a house with only one bathroom. The best thing for you to do is research how much the 2nd bath will cost to add and how much added value you will get to your home.

Well if that 4th possible bedroom is that small that might be a place to add a second bath. Just a normal bath. Because people in that price range have children and they like 2 baths. Heck I don't have children, and I insist on two baths. I've turned down houses solely on the one bath. And by the way, putting a full or 3/4 bath on a floor where there are no bedrooms makes no sense to me. Put a powder room but don't waste the space in the common living areas on a full bath - Is there a way to add the bath so it appears to be attached to your largest bedroom? Make it a master suite, just put a 3/4 bath in for the adults?? So you have a three bedroom 1 and 3/4 or 2 bath home - people consider not fighting over the bathroom in the morning a huge plus. I guess it all depends too on how much it would cost and what you can afford to spend. You might want to talk it over with your realtor to see if it is worth the investment. Walls are cheap, plumbing is another story.

My advice to you is to get a realtor and a contractor at your house at the same time and compare the two. Is it worth adding a bathroom? Will the asking price change? Will it make a difference?

Hope this work~

Good luck~

Find out cost of adding at least a powder room, better yet a shower bath. Add in the inconvenience of construction and repairs to the area after construction.

Do you want to do this? Do you want to reduce your asking price by this amount?

I agree that you should list as a 3 BR with possible 4th. Someone may want the 4th as an office or turn it into that second bath. I'd let the buyer do the deciding.

Another question: With 70 year old houses, are any becoming teardowns? Could yours be marketed that way? What's the value of just the land?

(We did a lot to update our 3 BR 2.1 bath 1950s ranch on a quarter acre. When it sold -- for top dollar -- the buyer did a teardown.)