What you are wanting to build is an Accessory Dwelling Unit or Junior Dwelling Unit, which hopefully your zoning will allow.

As far as packing an accessory dwelling into your home and vacation renting. 

@Kenneth Garrett I have a no smoking policy in the interior of my properties, but tenants can smoke outside on their patios or backyards, this is inclusive of vaping. 

The other option is to build an addition with an ADU (accessory dwelling unit) finishing the house and adding another 650 sqft to the main house ( 3 bed 2 bath ) and a 550 sqft attached ADU (1 bed 1 bath). we could rent the ADU for appx $1000, to $1200 a month.

We haven't had any tenant who didn't smoke inside once the weather got bad, no matter what they promised at the start.Also, people who smoke have a greater likelihood of taking up other addictive habits as well.... drugs, gambling, etc.Here's a copy of our No-Smoking policy, which has worked well for us:NO-SMOKING POLICY.Tenant acknowledges the premises are designated as smoke-free and agrees not to smoke and will not allow any of their family or guests to smoke on the premises, either inside the unit or outside on adjoining grounds.Tenant agrees to abide by this no-smoking policy.This includes smoking tobacco, marijuana, any other substance, and vaping.

In the Utah market, the distinction lies in "owner occupied accessory apartment" vs "legal duplex."  

Put shelving in the showers to hold shampoos, soaps and razors(Command) makes great shelving for these accessories(Command Shower Water-Resistant, Clear Frosted, 1 Caddy, 4 Strips (BATH11-ES), 4.8 x 11.3 x 6", https://www.amazon.com/dp/B00H... ), makeup mirrors. supply in the kitchen anything that you would use in your own home. 

This kind of policy can cover tobacco, marijuana, and vaping chemicals too.

Dont rent out to students if you dont have to, just a warning, they party all the time and smoke/vape.

Hope this helps.Core and shell means not including any finishes, like cabinets, bathroom accessories, wood flooring, etc.