STR House Hack - do these numbers make sense?

[Ross Bowman]

Greetings friends! Wondering if I could get a sanity check on this. Here's what I'm looking at:

- Currently purchasing a primary residence, closing soon

- There is a detached garage which can be converted to a living space. I'm considering converting it into a cottage and doing monthly STR rentals to local travel nurses (that's a big thing near me). It looks like I could get around $1200-$1500 per month for it.

- The estimates I've received have been around 25k total to convert, so let's say 35-40k if we factor in contractors going over budget and then furnishing it afterwards. 

My mortgage will be around 2k a month, so if I did this it would cover a big chunk.

*Where I'm stuck*: 40k could go towards a down payment to another actual property, vs adding a small one onto my primary. That's a big chunk. I'm also getting a bit nervous, as I don't *know* for certain that it'll rent. I searched online and it looks like other's do this, but with STRs you never really know for sure. 

Does this seem like it's worth doing? Or should I put that 40k into a net-new property entirely? 

*Note*: this would be legal/permitted to do where I live. I'm not in California or a state that has strict ADU regs.