As long as the LT tenants understand what's going on and you're considerate of their needs (privacy, safety, noise) I don't see any issues with it.Good luck!

All the "noise" about doing it part-time, virtually, and the like is just that - "noise." 

She pays her rent early, is very neat, and seems unfazed by the construction noise going on in the apartment adjacent to hers.

I thought this was going to be a big tree, you could take that thing out in a weekend, on your own, then call someone to grind the stump, maybe a few hundred dollars.

I don't know of any legal requirement to have to supply a kitchen on a room rental but downsides are: lower rents, tenants may likely complain about all the construction noise and dust, potential law suits, much lower rents to have to deal with the construction, a lot of disclosures needed, etc.

Have you gotten any noise complaints from the local neighbors there?

It's not entirely logical, but it also grinds my gears that I'd essentially be giving the banks what feels like a gift by converting a low interest loan on the property into a market rate loan (assuming the new buyer is using conventional financing of course).  

I'll keep grinding.

On the other hand, I would be very direct and get it in writing that you plan to build on that lot during their tenancy or they can probably break the lease as soon as you start making noise. 

It's where people are most likely barefoot and it will be warmer on their feet, they don't wear shoes as much so it doesn't get as dirty or wear as quickly, and it can buffer noise to the downstairs area.