Forgive me because I really don't understand legal matters, taxes and the like very well, but hopefully someone here can help shine a little light on this for me...So here's the situation, I have my personal house, which I also built a 1bd/1bath rental onto.

The benefit to Pittsburgh as a whole is that so many landlord leave their units and buildings pretty dated.

@Shawn Ryan I wouldn't bet the farm (but I'd bet the cat*) that she's going to end up leaving money on the table if she sells on her own.If she finds her own buyer, it's highly unlikely that she has the person who is willing to pay the highest price for the property.  

We pay for landscaping and the oil bills, which is roughly another $300/month averaged over the year, leaving us with a $600 month ‘profit’. 

It also means you don't have to worry about them leaving 

Your plan is to provide separate water/sewer for your two legal lots, and leave it at that.

Is there a huge amount of work to turn them over if they did leave?

I'll leave it at that.You are just incorrect.

(If anyone asks me to leave them alone, I honor that.) 

I can only paint and leave all other leaking toilets and broken lights to other people.