First time home buyer - house hacking with a heating problem. Mini splits? 3rd unit?

[Roger Creekmore]

My wife and I purchased our first home, a multi family, to house hack in late 2024. The property is in great condition and we got it at a great price! Downstairs 2br 1bath unit we are living in. Upstairs is 1br 1bath. There is an unfinished 3rd unit above the garage that is connected by a hallway to the 2nd unit upstairs. This unit has already been indicated by the city that it can be approved as a 3rd unit. We have two main issues that I will outline below: 

Heating

Two heating systems in the home. Steam boiler that heats the bottom floor and top floor apartments. One thermostat controls BOTH units currently. We have already talked with multiple HVAC contractors and splitting to two zones is just not an option because of steam heat. We just had an electrician come in to talk about our options for heating upstairs.

Option 1: Electric baseboard heat - electrician advised against that for many reasons. Mainly the panel is in the basement and it would require a ton of work and paying for labor hours + repairs. 

Option 2: Electrician recommended mini splits - said 2 units should do the trick and would cost around $6-$7k.

Heating system 2 is forced hot air oil furnace specifically for the 3rd unit. Everything is in working order there. 

Do we go with the electricians recommendation and eat that cost to get the upstairs unit properly heated? Are there options here we may not be thinking about? Trying to stay as affordable as we can ideally. I cannot imagine that having 1 thermostat for 2 units would be possible especially once we move out and have tenants in both units. 

3rd unit dilemma 

The 3rd unit is not finished. It would work as a 2nd br and 2nd bath for the upstairs unit, but does not currently have a kitchen. Also, only one exit/entrance that is directly next to the other unit upstairs. In order to have this approved as a 3rd unit we will need the city to come out with a building inspector - who will outline everything we need to get this approved. This could be minor, or major work that we wont know about until that inspector comes out. 

We have thought about making the 3rd unit an Airbnb because then we don't need a full kitchen. In that scenario - I would worry that our long term renters would not like that strangers are walking up their steps and entering the doorway 5ft from their front door every weekend. 

Are we over analyzing this? Is it worth it to go through the proper process with the city and run the risk of a huge expense to make this a 3rd unit? Or do we just list the entire upstairs as a big 2br 2bath and get the most rent we can? If we rent upstairs all in one - then one side of the unit would be paying for oil heat, while the other side would be paying for electric/mini split heat. 

Thank you in advance! Happy to provide more info or photos. Apologies if this is not the right place for these questions.