I attached the linear regression model we use and the rendering of what we build.

I am considering adding a small studio (attached junior adu) of about 264 sq feet to my home in San Jose. 

Just attach that to the highest income producing property?

Sounds like a single family home with an attached garage which to me sounds like it could be R-1 single family only residential where you are unlikely to be allowed to add additional units unless you're in a state  forcing municipalities to allow ADUs of some sort.

If purchased with financing and the security interest represented by the UCC was timely perfected, I would have a completely different opinion.It is actually a loan, however, the panels are not attached to the property as is stated in the agreement:"Personal Property.

We provided the form in the contract we signed and had them attache it to each invoice submitted.

I would send an email reminding them what it means being both on the lease and jointly and severally liable for the payment of rent and that you are required to follow all terms of the lease as written, including filing an eviction that will attach to them both if necessary.

I have a bathroom attached to it, so I was planning on keeping it with the garage so I will end up just adding a small kitchen, living room/bedroom.

I am interested in adding a 264 sq feet space in my front yard, attached to the main home for rental purpose.

Because it is the LAND that appreciates over time not the home attached to it.