Could be converted into one very large home - here's how

The rear could be extended out to be in line with the staircase or beyond.  Raise the floor level and build either concrete walls or wood structure to enclose the levels.  Move the windows from existing walls to the new walls.  This would allow for the whole house to be reconfigured into one dwelling place but maintaining the hotel room at the front for a caretaker or Airbnb guests.  

The house can then be designed around your own lifestyle and preferences, such as kids play rooms and office with additional storage area.  The opportunities are endless along with the vacant lot next door.