Have you considered removing the dining area and adding more cabinet space and just adding a breakfast bar and some bar stools?

I think it could be renovated as a bed and breakfast.  

The RPOA breakfast meetup is on Fridays at 8am at Cheshire Grill on Plainfield -smaller group, speaker, haves and wants.

I suppose it would work much like a year round vacation rental, however I'd have to get the city to consider it a hotel/bed breakfast (minus the breakfast).  

We will be providing breakfast and lunch. 

The IRS looks like if you provided services for your short term renters (breakfast, cleaning) ect....but also they're definitely looking at length of stay. 

If you make decisions, or if you predetermine future events based on the way they "sound", you are going to miss out on a lot of great opportunities.If the first time anyone heard any of the following statements:1 - I can build a set of monkey bars, out of wood, wire and cloth, and it will allow me to fly,2 - I'm going to take a bunch of "1's" and "0's", string them together in different patterns, and it will allow me to think about anything faster than the speed of light.3 - I'm going to eat a white oddly shaped ball, that came out of a chicken's....and it will taste great.4 - I'm going to collect and drink a whitish liquid that a cow had sprayed on the ground, and it will taste great....the words, "it sounds too good to be true" were overheard, and none of the above were done because everyone that heard those words believed them, we may never have the use of a computer, and airplane, and would not have been able to eat breakfast when hungry.Money doesn't make a noise, so money decisions shouldn't be based on what you hear...but by what you see.Credit cards work, if you are disciplined enough to work fast enough to pay them off before the interest kicks in.  

Thinking about doing a bed and breakfast type situation on this one out of the main house! 

It will not approve an FHA mortgage for boarding houses or hotels  (tourist dwellings, bed and breakfast, etc.).

If you are living in the home then that changes everything as the risk is much greater and therefore you will need a commercial policy AKA you are now a "Bed and Breakfast."