Advice on renovation on a fixer upper

[Ankit A.]

Hello,

I am single, in my early forties. I currently own a SFH in SF Bay Area.

I am in escrow to buy a fixer-upper property in a beach town on central coast. The house has amazing views but needs extensive rehab due to multiple code violations and unpermitted additions/alterations. My idea is to rehab the property, maybe make it a primary home for a year or two and rent it out until I retire (perhaps in my late sixties). When I retire, I may have to do another remodel/renovation to this beach town house possibly.

I am torn between whether I should spend more money now and add more square footage and do it up really nicely or should I just fix the code violations and pull permits or remove unpermitted structures and be done with it for now?

Adding square footage (or maybe an ADU) would certainly fetch more rent, but at the same time more money is tied up as well for new construction and more of my time.

This being my first time ever experience with major construction and the payments for two houses in northern California, recession looming in near future I can’t seem to make up my mind.

Any idea, how should I approach this problem? What other factors should I consider to come to a decision?

Thanks in advance for your response.