When we do have kids, our plan is to look for a house that makes sense to build a detached accessory dwelling unit on the property.  

And, because you have been depreciating, you know what your original depreciation basis was for the dwelling structure and how much of your purchase price was allocated to the land at the time of your purchase.  

We are specializing in Accessory Dwelling Units (ADUs).

Subsequent clarifications, post Costa-Hawkins, have determined that if there is another structure on the same lot as a single family dwelling, then the home is not “alienable separate from the title to any other dwelling unit” because it cannot be sold separately, and the single family dwelling will not be exempt.

(Its habitable now,  by then will be nicely fixed up)The fact that there hasn't been an official 'boarding house' zoning designation for decades up until just recently (SEDU's - small efficiency dwelling units)  means that most of that kind of housing is at or near end of life and anything replacing it is new and comparatively expensive,  or its being replaced with housing that appeals to higher income people.I support some of the zoning changes the city has been making,  like allowing 2 ADU's on most residential lots. 

You are also finding out this is a people business, and people are messy.A dwelling unit is very much like a car.

Appreciation is no guarantee and the tax write-offs are not great compared to investment properties.However, a primary home is an essential part of life (no offense to my van-dwelling vagabond friends).

See the attached link and scroll down to "Multiple parcels" where it says each parcel may contain only one dwelling unit. 

Then you will have to switch to a homeowner/dwelling policy once repairs are made.  

You have to use mother in law suite, accessory dwelling unit or similiar term and check your local regulations.