Where is the 3 bedroom house?
If it is in a better location I would go with it.
If a house is discounted because it is in a bad loacation (in this case the road), when the market moves it will move more slowly so if you want to sell and move in a few years a poor location will have an impact on the resale value.
Also ask yourself how much the renos will cost and how much that will affect the resale value. If it was renovated what would it be worth? How much will the renos cost? Sometimes renovations can cost more than the value they will ad in which case you will lose money on the property.
I've lived near a busy road - it can old quickly having to wait 5 minutes for a gap in the traffic so you can get out of your driveway and having impatient drivers up your bum when you want to pull in.
I should say that the very idea of renovating makes me shudder. I used to think it would be fun then I painted a few doors and after that I had it out of my system.