Turning a 2 story shed into a tiny home?

[Account Closed]

I bought a house last December. Right now I rent it out to 2 other people. I have 2 other rooms and trying to rent them out. My buddys said is a contractor and he said he would live in the shed if I remodeled it into a tiny home up to code. He said hed pay 800-1k/m. Its on a super nice lot thats over a half acre in a super nice neighborhood. Very secluded and quiet.

About the shed. Its 2 stories. First floor is a work shop and has lower ceilings. Probably 6'4 ceiling. Felt like I had maybe 4-5 inches above my head(im 6 feet with shoes). Not including when we put a ceiling up and floors.  

So is this worth turning into a rental if I can do it under 30k? Will lower ceiling deter people? I can add a drive way to the back made of gravel, is that worth it? Any other feedback on this.

[Nathan Gesner]

If the renovation costs $30,000 and the unit rents for $800 a month, it would pay for itself in 37.5 months (assuming no repairs, no vacancy, etc.)

I'm always skeptical of a "buddy" making promises. What if he flakes out? What if he was exaggerating and will only pay $500? You need to research your market and determine the true, objective value of what you're considering before you put a dime into it and make a big mistake.

And have you checked zoning to confirm this is legal?