So I've read a few of the articles about a Luxury House Hack and hoping to get some feedback from the BP community about the numbers on a specific house. We live in a vacation city in the mountains of NC, robust tourism, and around 4 million visitors annually. The real estate market continues to soar and it's tough for people that live in this area to find affordable housing, which is why we are considering a Luxury House Hack. :) We've come across a property in a very desirable residential neighborhood, and this house is unlike any other home in the community because it has been converted into a duplex, with the basement having a completely separate entrance, making it a 1 BR apartment. The home has not hit the market yet and the asking price is $475 and needs $75 in renovations, so all in at $550. The basement could easily rent for $1000 per month if we went the long term rental route, however if we Airbnb the basement, we could generate $100-$125 per night conservatively, or $1,500-$1875 based off 15 nights rented per month. Due to many residents in our city going the Airbnb route, a lot of the HOAs within communities are cracking down and sometimes eliminating the option to Airbnb your home. It is currently legal to Airbnb this home but if things change, we want to plan for a worst case scenario and have the fall back of a long term rental at $1000 per month. If we fall back on this option, are we reasonable to place a 1% rule value on the rental portion of the home? In other words, if the all in price of the home is $550, can we really say that we only paid $450 for the home if we plan to rent out the basement long term? The 1% rule is nearly impossible to meet in our area so we feel like it would be a solid option for us, considering it's the neighborhood we want to live in and it gives us options to create income. When it comes time to re-sell the home one day, the renovation price of $75 is already including adding stairs inside the house that connect the upstairs to the basement so the entire square footage can be counted and maximize the price of the home. Any feedback is welcomed. Thank you!