Hey Ludwig - Personally, I wouldn’t bother with an appraisal right now.

In each category, note how much you are bothered or stressed on a 1 to 5 scale, with 1 = not bothered at all and 5 = stressed out: Pain Points Stress1 to 5 Pain Points Stress1 to 5 Unit turnover Exterior maintenance Advertising for available units Deferred capital expenditures Tenant screening rules Plumbing or electrical emergencies Tenant selection / discrimination rules Mortgage payments Documenting move-in conditions Bookkeeping and bill paying Documenting ongoing conditions Taxes and insurance premiums Dealing with tenant complaints Risk of late payments or non-payments Dealing with neighbor complaints Risk of property damage or vandalism Mold, termites and rodents Premises liability Interior maintenance Evicting tenants If your completed table has mostly 1s and 2s, then congratulations—you are a happy landlord!

If the complainer can't smell it in their apartment, but, are uptight enough to be bothered by the passing smell in the hallway...it may not be the smoker that has the problem.I have found that complainers/boat rockers are often wound a bit to tight, and that when you are a highly responsive empathetic landlord, they turn you in to their own personal karma delivery machine, to right all the wrongs that previously fallen on deaf ears.Good luck.

One other possibility: the property has already been rented, and they just haven't bothered to take the ad down yet.

Why bother?

Quote from @Jared Leggett: Good evening everyone this is going to be a little long so I hope I am not a bother!

The nature of the relationship to me seemed exploitative and it bothered me a great deal. 

Honestly, they do not bother me much at all.

Why bother? 

With permit, benefits are 1) get depreciation and other tax write off benefits since it’s a permitted investment purpose ADU, 2) probably better for resell value, 3) have a separate address and don’t have to bother sorting out mails for our legal tenant, etc. without permit; benefits are 1) no hassle to get the permit, 2) no permit fees, 3) no tax on rental income (as it is more like a “roommate”)Has anyone gone through a similar situation before?