New investor - Basement for short-term renting

[Jamiru Mutebi]

Hi everyone,

After reading a good number of experienced investors' posts from different forums, my wife and I have decided to finish our basement for short-term renting. Having said that, we would like to ask for your advise on the following questions;  

Question 1. What are the pros and cons of short-term renting on a primary residence?

Question 2. Can we use our home equity for a project like this?

Question 3. What tax implications might arise from this kind of investment especially on a primary residence?

Thank you so much for your help, and advise in advance.