There are many reasons that a 'house-hack' property can cost moreA) Potentially in a better neighborhoodB) Privacy amongst people living in the houseEX - a 1500 Multifamily home will allow more privacy to its residents than a 1500 Single Family Home as there will be some shared walls that separate the homesC) Some cities have little supple of multi-family homes so they make them more expensive.I normally try to avoid buying multi's in cities with a low supply.

These would just to document the state of the property.Would it be braking privacy laws?

There are definitely down sides to converting the garage and living in it- one of them being privacy. 

Again, my understanding is that to gain the same level of protection from a trust that you can from say, an LLC, you would have to use an irrevocable trust which requires you to give up a lot more control and is significantly more limiting.I have been led to believe that LTs are good for privacy and maybe some creative methods of REI but in terms of true asset protection, they are not a good option.

Privacy? 

Here are some good resources to further educate you on Trusts for Real Estate purposes.Mark Warda : Land trusts for Privacy & Profit (check Amazon)Bill Bronchick: He is an attorney in Colorado, & Real Estate Educator.  

It probably depends on privacy needs. 

Because if you get more from renting to 1 person than to many, it makes sense to rent to only 1 person.Keep in mind that rents per person will be lower due to the lack of privacy, etc.

I explain to the tour requester that I cannot disturb the privacy of current occupants, but I can share the video after the initial tenant screening.

I was unsure if this is allowed or if it is inviting on the tenant's privacy being on the property.