I have a bathroom attached to it, so I was planning on keeping it with the garage so I will end up just adding a small kitchen, living room/bedroom.

However, after a quick tour, my agent informed me that neither unit has central AC or a washer and dryer, and the bathrooms need some work.

It has granite countertops, brand new appliances, new kitchens and bathrooms, etc.

We opened it up, made a nice kitchen, changed the flow of a bathroom, new floors, paint, roof, and deck.

Especially when it comes to bathrooms and kitchen.

Sharing a bathroom and kitchen?

However, keep in mind, the renter will need to share a bathroom with the current tenant, and I've spoken with her about this, and she's fine with this arrangement. 

I have a 5 bedroom / 2 bathroom single family brick rancher.

We removed 4 walks (including load baring), installed 2 walls, added half bath, replaced all plumbing and electrical, added new eye brow porch, painted full exterior (changed color), replaced all flooring, new bathroom and kitchen layout with everything replaced (shower, cabinets/vanity, counter, appliances, etc), stocked with new furniture, added mini split, removed gas/wood fireplace and added a new electrical fireplace, and placed initial STR tenant in 2 months and 1 week.  

They instead focus on fully gutting their projects and install entirely new kitchens, bathrooms, fireplaces, accent walls, etc. and any exterior or mechanical upgrades necessary.While I understand this whole hog strategy, part of me says this will end up increasing the value of a home so far beyond other homes in the surrounding area that it wouldn't sell for what it's likely worth.