My husband and I are buying a house right now that needs some major renovations. The main floor has the master bedroom, master bath, and a very small bedroom. The rest of the bedrooms are downstairs in the basement (and one more bathroom). We've been thinking about removing the spare room and expanding the bathroom. Or moving the bathroom to where the spare room is and making what's a bathroom now a walk in closet. Here's my poorly drawn floor plan (not drawn to scale):

The master bedroom is 17x12 ft. The bathroom is really tiny with the vanity and toilet on the left, tub on the right (no shower). The spare room is also really, really small.

My main concerns are removing a bedroom because I fear it will lower the value of the house and if we have kids, we'd have to put a nursery in the basement. Would turning this area into a Master Suite make it worth removing a bedroom (money and space wise)? Is it true that removing a bedroom on the main floor will make the house list as a 1 bedroom? They don't really count basement bedrooms, right? Thank you!