House hacking my home in los angeles

I am looking into house hacking my house in los angeles ca. This is my current situation, I purchased my 2bd/1 ba home back in 2015 using a va loan with 0 down payment, My mortgage payment is $2260. I have a detached back room 231 sq ft that i am currently using for storage has only electricity going to it, 2 ceiling fans, 2 windows, no plumbing, gas, or air conditioning. I want to convert this room into a studio rental unit to create some cash flow instead of it just being used for storage. studio's are currently renting for $1000-$1200 in my area.

Question 1) What would be required to make this room livable and rentable?

Question 2) What type of financing is available or recommended for doing this type of house hack

Question 3) What are the pro's and con's of going this route to start my real estate investing?