One way to potentially increase income could be adding a 4th bedroom if it's possible somewhere within the property and the square footage allows it

If single story small homes works with zoning and that criteria, then go for it, but either way, I'd increase the square footage to 2K or so. 

GoPro's would give some very interesting footage I am sure.

There are some Owner Builder and Builder Assisted programs that can assist you in this process and it can be seamless and hassle free with your having already done the hard parts (securing financing and land)Ideally you can find a builder who will do your project at a certain dollar amount a square footage which I am sure there are several in the Austin area.

If you do enough research across markets you'll see that certain property features drive more revenue than "average" homes in those same areas (all else equal), so starting from scratch allows you to reverse engineer and "stack" all of those features while minimizing other costs/ unnecessary square footage. 2) I like the idea of building w/ commercial zoning and having the property valued based on cap rate instead of comps.

Is there a rule of thumb ratio of vacant land to square footage of building?

It's 3 bed room and 1 bath house of 900 sq foot, single floor, not a huge square footage. 

Myself and many of my clients are looking for value add opportunities, houses with opportunities to add square footages or beds/baths.

Sold it for 275k and a lot of that was due to the additional square footage we were able to get updated.

The banks won't underwrite the income or the square footage.