My initial thoughts are to convert it into student housing where I've heard some people will rent rooms out to international and domestic students and collect a good sum. 

FWIW, I spent some time chatting with the folks in city government down in Fletcher (just south of Asheville) about converting a property to STR.  

The only way the tenant can lock the door from the outside is with a key in the deadbolt.I have had tenants request this and we convert them over but I have had tenants move into a unit that was converted to this and request to be able to have a traditional lock method (able to lock without needing to pull out the key).requiring key to lock is a good solution if all your tenants are fine using a key to lock. 

Or    I can purchased an older SFH and converted into a duplex for rental income. 

I am working on my second house hack now converting a walk out basement into a unit to rent and living in the upstairs!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $340,000

Our 5th unit, single family home zoned for secondary suite.
I will be covering this unit into an up and...

Currently a 2 bedroom but will be converted to a 3 bedroom at next tenant turnover.

I would suggest only building homes that could also be converted into rental properties.

She wants to hold on to it for sentimental reasons and not convert it into a rental.

Neighbors put a new wall up so water puddles on our side maybe 20 ft across an inch or two deep when it rains.