Converting my single family rental to a duplex.

[Kellie Alkayam]

I have a single family rental property in the Denver area that appears to have been used as a multifamily at some point in its life. There is an addition behind the garage that is currently used as a master bedroom, but has its own entrance in the back of the house, a bathroom, kitchenette area, and mudroom that has space for a washer and dryer. It's essentially a studio apartment that has a door connecting it to the main house.

For the last 3 years, I have been renting the house to students, generally 4 at a time, and it works great for roommates, but my current tenants are leaving in May, and I have been debating converting that addition to its own unit. I am trying to determine what I need to do to make it work. My biggest questions are how to divide up the utilities and mail since there is only one meter, and it's all one address. I have always been warned away from including the utilities in the rent, but I am not sure they can really be split up between units. 

Have any of you done this? What sort of challenges did you face?