Insurance is getting more and more expensive with renewals doubling or even tripling in some cases.Insurance companies will issue notices to quit if they see stains on your roof from google earth. 

There are other considerations that may still make it impossible to permit the construction of the building even  if the by-right use permit is obtained and its important to have an architect closely examine how the proposed floor plans will layout to confirm egress &  bedroom windows + localized zoning overlays along with a  number of other factors.

The rents are still growing on the smaller ones too as I think the rents compare favorably for people coming in when they look at a nice hotel room for 150k to 200 a night or a one bedroom cabin for 200 a night. 

I strongly believe that legislation should be introduced to prohibit property wholesaling and also prevent double closings unless it can be demonstrated that the property's value has been substantially improved.  

I have seen a lot of growth here and am personally doubling down on my investment property purchases. 

That said, it looks like if I rent out the bedrooms separately, I can earn more for the property overall (500-600 per bedroom vs 800-900 for the whole house.)

Many will disagree with me on this, but I have personally originated several loans underwritten with Fannie Mae for conventional financing and accomplished the financing when there are 4 leases for a 4 bedroom SFR. 

The more imminent needs are the electrical, plumbing, roof and upgrade to double pane windows, most of which will be pretty dusty if there are humans living in the space.

We have mostly have 1 and 2 bedroom apartment. 

So, if evenly split between buyer and seller that is 1.85% to each side almost double the norm.