You also remove the risk of emergency calls from tenants when it fails.

She had just gotten out of law school with $160K in loans, and that was not all our debt, and we have some other debt as well (small medical bills and owning on a car).

These things happen and most tenants don’t have a large enough emergency savings which is why they rent.  

I'm guessing maybe it was the "emergency bathroom" when either the main bathroom was being fixed up or otherwise unavailable.I've been trying to figure out a highest and best use for this space, and I'm just coming up empty.

Perhaps the implementation of an after-hours emergency service or something of that nature would satisfy code.  

Keep at it.I don't know the exact details regarding emergency egresses in your area, and, I did not see anyone else mention it here so I thought I would. 

We have a very diversified economy with tech, government, education, medical, and service/tourism (yes, service/tourism is hurting right now, but post-vaccine I expect it to spring back), so we're a fairly safe bet despite the current hot market.

Medical Payments: Provides coverage for an injury suffered on the premises.

I also learned to make sure you have 6-9 months of mortgage and expenses set aside because if you depend on rental income to cover house-related expenses with no emergency fund, you will find yourself in foreclosure.

I have a "Landlord Condo Insurance Quote" through Geico who I use for my primary residence that covers Dwelling, Household Furnishings, Loss of Use, Personal Liability (up to $500k), Medical Payments, Replacement Cost Household Furnishings, Building Ordinance or Law Coverage, Limited Fungi or Other Microbes Liability & Remediation.