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You want to avoid renovations while you're living in the house. Dust gets EVERYWHERE along with inconvenience. There's also an outside chance that you'll never get around to it (too much hassle after everything is done and tidy). If you've got everything open, do it then. You're not judging against the cost difference yet so at least draw it out with a master bath and get numbers. We have 2 closets in our master, because they're both needed (I'm not using her walk-in).
Approx how many square feet is the ranch currently? If it's near 1500sf, you can do 3 rooms and 2 baths easily with something like 1300sf above. We even have a 4th and the smallest room is 11x11.5.
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