For now, for my own tracking purposes, I'm trying to wrap my mind around spread sheeting the expenses and determining which accounts to pull money from to cover them:How will deductions work since its part dwelling for me and part investment?

We all obviously want protection here.How about this:  I have a 250k duplex in an LLC, went to AllState insurance that I use to insure my dwellings including the rental business. 

Great guy, super knowledgeable, and when he saw the kitchen in the garden unit he said “Yeah, we’d have to rip all of this out because the ceiling height is too low meaning there’s no way it’s a legal unit.”The zoning is also RS-3 (2 units only, but apt. is in the Accessory Dwelling Unit zone) so to my knowledge we’d need to change the zoning.

Property taxes are assessed only on the dwelling unit.In my case, I  declare the land value as zero and use the purchase price of the condo as the depreciation basis for the dwelling structure.

Whereas Airbnb skews more toward millennials and tends to be more urban dwellings.

David,If you go the LLC route, be sure your Dwelling Fire policy on the Rented house shows the LLC as the named insured. 

DekalbZoning.com defines R-75 as:  Single family residential districts which allow up to 4.3 dwelling units per acre with provisions for customary accessory uses.

You can also segment the audience based on location of property, type of dwelling, etc.

Am I dwelling on this too much?  

Also, I am considering buying a multi-family dwelling just to test my investing and landlording capabilities.