House Hacking - Need Advice

[Taylor Busick]

Hello, 

I am looking to obtain my first rental property and would like to live on the property with the renters. Ideally, I would like to convert this two-level structure in the backyard into a one-bedroom apt with a loft. I would live there and the renters would obviously rent the single-family home out

I know it's possible, but is it smart? I would have to run water and electricity to this structure, it also needs insulation and drywall installed. Lots of work for a small space.

Need help. 

Taylor