I'd let them know you'll not be renewing their lease, you are going to a limited pet / animal policy, 1 per unit, adult weight limit of 20 lbs. .. or better yet no pet policy.Until then they must provide proof of insurance that cover them for their dog and I'd check again with your agent and see what their thoughts are,, I bet your agent says, to get a remove this animal as soon as possible and then you'd have to give them a mutual lease termination to show compliance for your insurance company until they are gone. 

Check out this link to a floorplan by Lennar, one of the country's biggest builders.https://www.lennar.com/new-hom...People are drawn to the flexibility of JADU floor-plans as they can use the space for all sorts of things: home office suite; room for an older teen; adult child living at home; In-Law unit; Airbnb; home gym; rental...

I've been in real estate related businesses all of my adult career.

Instead, they will do it themselves or let their nephew, adult child, cousin, brother, retired parents or some other family member do the arbitrage. 

Here's mine as an example:Applicant Screening Criteria(June 2023).Please review the following criteria before applying.3 to 1 combined gross income to rent ratio: $5550 to $1850.No Evictions (5 years).No Bankruptcies (5 years).Credit score of 650+.Income verification required.Existing landlord debt disqualifies application.All adults over the age of 18 must submit a rental application, meet the application criteria, and sign the lease agreement.Identity documents must match applicant(s) information as stated on the rental application(s).No incomplete applications.No more than two tenants/occupants per unit.

If you have a web cam, that's great!

Those skills are vital to your success as an adult- even if you think you have those skills, trust me, you don't.

I’m an adult and don’t need their approval.  

@Wallace PendletonYour kids are going to appreciate you so much once they are adults!

We have one SFR (our previous home) and we do our own version of house hacking by renting our downstairs MIL suite to two of our adult children.