I heard people have had success setting up divided rooms with desks, chairs, etc. to rent out as pseudo office space.

I'm worried about home affordability for them in the future since prices are very high right now - if they choose not to rent out the properties they could live in them (probably not the apartment building) however they want to divided the estate out, although the Indiana SFH is not an equitable property compared to the California ones in terms of property value. 

This 100% what's happening, and when the wealthy create a larger divide it becomes a scarcity play for typical Rupert and Lolita.

I have a comprehensive lease with all my tenants that states they must pay for utilities but not specifically that it will be divided exactly like this. 

Individuals overwhelmed by debt may need to liquidate their property to pay off creditors.Divorcing CouplesDivorce often necessitates the sale of shared property to divide assets quickly.

We had someone build a divider wall and then we locked one of the doors.

You just need to do your homework and know your market, add-value and sub-divide the lots.

Its not just a matter of rearranging dividing walls plumbing and electrical.  

There is up front costs like dividing the living room into 2 more bedrooms etc plus the simplier furnishing.   

Mathematically, you take the expected interest rate and divide it by 72 to get the number of years for your investment to double.