Functionally, it operates as a 2-story home since the downstairs area has multiple windows in each room and plenty of natural light.

Agents like the one who sold you this property give us all a bad reputation.

For cash-on-cash evaluation of rental properties, it is critical to identify ALL of  your acquisition costs. 

I use HML for all transactions

Cash flow is basically a function of equity.

The property was my primary residence for a decade and now functions as rental unit so I am happy with the purchase overall and it has worked out well.

After all, square footage is about more than raw measurements; it’s about how seamlessly the space integrates into the home’s overall living enviroment.If you’re serious about making that office “count,” consider checking local guidelines or even chatting with a reputable appraiser in the Phoenix area..from what I’ve heard they’ve handled properties like this before.

Costco all the way.Mike

On the advice of the fireplace guy who did our last cleaning/inspection, we sanded down the brick inside and painted it with the high heat black paint, and it states in the lease that they may use a fireplace-style candelabra if they'd like, but any other use will trigger all the rules in the Fireplace Addendum.   

All of this.