Use detached garage with permitted bathroom from the 60s as Airbnb?

[Daniel Loane]

My partner and I are in escrow for a property that's part of the coastal area of Los Angeles and we are wondering about our best strategy for the detached garage. We are planning to live in the main structure ourselves.

The 2-car detached garage has a bathroom that was permitted in the 60s. The full structure is pretty much converted to living space already but the conversion was never permitted - it has drywall, electricity, flooring, separate entry door and a few windows. That was supposedly done decades ago based on the wear and tear on the floor. There is no insulation though and the electric garage door is still functional.

I am wondering about options to utilize this space - preferably as a short term rental but I would consider mid- and long-term as well. Any recommendations on the best path forward? My understanding is that I may have the following options but don't fully understand the process overhead and short-term implications yet.

(1) Convert to an ADU

(2) Convert to a guest house

(3) Convert to a 2-story ADU to create more living space

(4) Leave as is and rent out as long as I don't put a kitchen in there (?)

Would appreciate any advice!

Thanks!