Try to avoid doing anything else that requires permits....in other words, paint, flooring, cabinets...are all fine.Or is it too late for that?

When people say I am going to do the renovations myself, they usually mean doing everything without proper permits and then they get screwed when they go to sell.If you can find a house hack where the side you will live in needs cosmetic, direct replacement (no permits) work, that would be ideal because you can do both by living in and soft-flipping your side while getting income on the other.

Depends on the 1st step, need to work with the city for the appropriate permits Can you folks - please add/comment more on this.

The sewer company tells me that it's covered however, they need to file for a permit to dig through the NYC DEP (manages the water and sewer lines) on Monday morning, citing that it may take several days.   

Unless the comparison includes permit checks, zoning check, walk through of the property prior to the sale (to see interior of unit), disclosures, plumbing and foundation inspections there is no way to compare values and having purchased mostly off market properties I can state with fact that the value is not easily discernible. determining a property has a failed sil plate or needs 100’ of new sewer run is not easily identified.  

Don't do it withour a permit.

When looking into it briefly, it looks like Mackinaw City, Traverse City, & Petoskey are the most restrictive on AirBNBs whereas Boyne City and Harbor Springs allow them with a permit, any information on how difficult it is to get one of these permits for an out of state investor?

There would be many more hoops to jump through with zoning and permitting.

You can also expect complaints of noise, trespassing, etc.If the situation permits, I recommend only allowing it for a significantly higher price and additional requirements in place.

If you average permit filed price per square foot its about $135-$140 traditionally for the builders because they are adding basements.