I know this is a plan we are looking into for the future, ideally building extra living quarters downstairs to accommodate for friends and family.
Essentially you can make your guest house fully self sustainable with kitchen and a bath depending on your budget.
Some great kits are available and there are plenty of D.I.Y instructions online.
I've been doing a little research, and in doing so, I came across the Tiny House Movement. It's basically a "social movement where people are downsizing the space that they live in".
The tiny house is a great option for a guest house.
Below are inspirational examples for a comfy, cozy and stylish guest house.
Above: Macy Miller's tiny house
Above: 136 sq ft space
Rock and Roll homes!