Sure one unit may have more occupants than the other, etc. but this is quite simply the simplest way and quite arguably the fairest way because of the issues with rubs above ; ESPECIALLY when this understood by the Tenant before moving in -- instead of focusing on utilities for the individual (RUBS) you are focusing on utilities for the space.

I’m not super keen on having long-term tenants in a single-family home in California, but I’m open to advice on that.The house is in decent shape but could use new flooring, a paint job, and potentially heating and/or central AC, as well as blocking/taking out the existing fireplaces (don't love the idea of fireplaces in a rental). 

Over the years, I have 1) invested heavily in education (underwriting, financing, market analysis, asset management, identifying macro/micro trends per market, etc), and 2) developed strong relationships with a network of accredited investors who are interested in diversifying and jumping into the multifamily space.

That 6 ft privacy fence is a good start, but you could also include separate entrances, designated parking spaces, and clear instructions about shared spaces (if any).Noise Policies: Include quiet hours in the STR house rules (e.g., after 10 PM).

FlooringWe plan to install luxury vinyl planks (LVP) throughout the home for the flooring.

While that’s appealing, the added complexity with tenant turnover, varying personalities, and managing shared spaces can make it a bit of a trade-off.I’m curious, how does it look in other markets?

If you did a septic complete and well drilled and electrical to the space then that has value in appraisal.

I had a tenant (not S8) that thought it was OK to let the faucet leak and run across the basement floor.  

A question about the building, will you own the ground floor of a building?

Oh Boy, I went browsing today......and I found an old building with reatil space (leased) on first floor and 2 separate attached Studios, and a 1 bedroom apartment.