Yes, it will hurt resale. I would rather not have guests going through a bedroom to use a bathroom either. Would be a really bad situation if someone was using that guest room. I am pretty sure, they wouldnt want others going through their room, when they may be dressing, or even taking a short nap, etc. You do not need to remove any plumbing. You just need to cap it all off and leave it, and then put the sink and toilet and cabinet into storage elsewhere, so they can be reinstalled quickly. If it were me, I would look for storage elsewhere in the house, other than a powder room, or depending upon what you are storing, maybe an outside storage building. If you have a garage, maybe can find a place in there for storage too. A powder room is a nice thing to have. And no, I have never heard of any other homeowners doing this, so yes it would be done very infrequently. Most times people are wanting to take a closet and turn into a powder room, not removing one, or moving the powder room to a new location, so they can use the existing room for a pantry, or laundry etc, that would be better in that location.

It depends on how extensively you wish to remove the plumbing. If it's just pulling out the fixtures and capping, you might be fine without a permit, but if it's more than that, I would say you likely will need one. Your licensed plumber should know whether the permit is warranted.

I don't know about your HOA ... if it's an attached home, they're more likely to care, as it could affect others, where as detached home HOAs are usually more concerned about changes visible from the exterior, but it's possible that the change in valuation of the home (loss of bathroom) could matter to them. I'd ask to be sure.

Price will somewhat depend on your area, but I usually assume $150 for the plumber to walk through the door. If you're doing this DIY, it'll be a whole lot cheaper. Don't forget to include your disposal costs (I assume you're not storing the old toilet.)

Getting the plumbing to a site is the expensive part, if everything is there and capped, it's not a huge cost to convert back. It's mostly the cost of the fixtures (and the plumber still costs $150 to walk through the door).

Going from powder room to closet is not the common ... usually renovations are going the other way. If you're asking about it being a DIY, replacing a toilet is often DIY, so the removal part would be simple, but make sure you know what you're doing with the capping, or you could end up with a stinky situation.

You could build a shelf to go over the toilet and sink and just shut off the water to them.

@cat_ky @BlueberryBundtcake - 6a/5b MA @Nick. Great suggestions! thank you for taking time to share your suggestions. I will get a quote with a licensed plumber and take the final decision. I will post my final decision here to help others with similar plans.

Taking out a half bath to use the room for storage doesn't make sense $$$ wise - one less bath, even a quarter bath, will decrease the resale value of your house. You've said you have a same floor guest room, could the closet there accommodate the storage you are looking for?

IMO do it if you need the storage more than the bathroom and then just put it back to a bathroom when you go to sell I really don’t see the issue as a design dilemma as much as an undesign dilemma . This is best answered by a plumber.

Unless it is an unusually large powder room, I can't imagine the amount of storage is worth the expense. But then again, I thought worthy-of-tv-level hoarding was unimaginable until I met my next door neighbor.

I’ve never understood a powder room opening up near a main living room or kitchen. I have been in homes where this is the case. I find this design appalling. I avoid using the powder room when at all possible. I would cap off and repurpose space with coffee bar and storage shelves leaving future access to capped off water outlets completed by plumber