The sister also wants to install SS appliances and upgrade the lighting accessories in the home at her cost.

The technical term for that is called an Accessory Dwelling Unit.

Signs shall not be placed on the wall of a residential building or an accessory structure.

If you put in a kitchen this could be considered an Accessory Dwelling Unit.

Miscellaneous bath kit for towel bars,  bath accessories installed 200.  

I would be very careful of this option of buying a home with  the plan to rent out a finished basement (mother-in-law or accessory apartment) and then move out and rent both the top and bottom. 

Here is where we are getting conflicting information and worried about everything going smoothly.We are buying a single family residence that has an accessory dwelling downtown where it is quite common for the old school mother-in-law cottage to be in the back.

Current w2 income covers expenses, child support, etc, but leave only a small amount for savings so financing all of this will take some thought.My challenge is that I need to get 1 more bedroom in the mix with 2 sons growing and needing their space.My home is in the very narrow part of the city where accessory dwelling units are allowed and I have enough land to do it.

About 3 months ago, we decided to invest in a house (with rental accessory apartment) in an area where 3 of our kids go to college. 

Claiming it as accessory dwelling unit seems out of the question since the lot size is only 4410 sqft.