If you were in a low class area, then people who need an extra bedroom will make due, but that looks pretty nice.

Especially since equity is usually fixed and broken down into equal payments, without interest being paid on the balance.Hopefully you had a lawyer involved in this, and be careful what you say or admit now.

If they are restricting construction then you have the potential for extra appreciation over time since supply will be constrained.

A 110VAC would take too long to heat and would.cost extra in electricity. 

We usually look at speculation as the furthest out variable for our investing, as we prioritize cash flow. 

Obviously, I don't know anything about your finances, so for all I know, you may have a few million in the bank, and this project is just a fun experiment that wouldn't even be a drop in the bucket if it all turns south...but, regardless, you'll want to model out what would happen if this project crashes and burns...As you may know, managing a rental in a D to F area (or even a C area) is usually not recommended (for many reasons), and funding a rehab with credit cards is also usually not recommended (again, for many reasons). ...even highly experienced investors often won't touch anything lower than C grade because of all the difficulties of managing and re-selling them...If you're dead set on rehabbing the place and keeping it, I'd strongly suggest studying up thoroughly on the local rental market and tenant pool (e.g.; rent medians and lower and upper bounds, typical days on market before securing a tenant, local vacancy rates, tenants' typical income, education level, employment opportunities, credit, and rental history).

Adding that extra unit will reduce your risk since you are adding another income stream to a property you already own.

My wife and I like to have extra income from the rentals.

I want to make sure I'm acting in accordance with the local government's legislation, but I'm having trouble making sense of all of the information I'm finding on https://www.roanokeva.gov/.How do investors usually navigate legislation requirements when starting renting in a new city?

Usually there are state/city grants available.