We recently went through a similar situation with a view to looking after my elderly Dad and Step mother, but we didnt go through with it in the end, mainly because as time went on, and mental capacity started to fail for the pair of them, they both became a fire risk, especially where kitchen appliances were concerned. They underwent a mental capacity test for memory, alertness, and safety issues, and both of them failed it. Step mother started to need care 24/7 and also started to become agressive if prompted to change clothes, take a shower, or simply to stay indoors during bad weather. She soon required a hospital admission, where she passed away a couple of weeks later, leaving Dad on his own, aged 91.
We offered to have him live with us, started a Garage conversion, applied for planning and building regulations, and planned to fund the 21k price tag ourselves, which would have provided a groundfloor ensuite room for him. Again things did not go to plan, his care needs progressed quite rapidly to needing 24/7 care, he started to wander off, call the police for a chat because he was bord, and refuse to get dressed, then being agressive when prompted to get some clothes on and cover himself up. His behaviour towards any visiting females was also abusive and darn right rude. He also started to roam during the night, and suffered a couple of falls, the last one of which he made a bit of a mess of himself, and ended up in hospital. He was also an alcoholic, but we didnt realise this at the time because he wad very crafty on how he managed to obtain supplies and hid all evidence from us regards quantity.
A multi disaplinary meeting was held regarding his care, it was decided that he was too much of a risk to return home to me, or back to his own bungalow, he lacked Mental capacity, so was discharged into a Care complex for further rehab and assesment, where it has now been decided he will be cared for for the rest of his days, and by a team.of people on duty 24/7, his needs had just become too much for one person to cope with on their own.
The Garage plans got a re think after this, and we eventually went for a 50/50 conversion, the front remained as a small Garage, still capable of storing a Mini or all the usual junk normally stored in one, a fire door and wall divided the rear section off to form a downstairs Shower room and ensuite, plus a Living area large enough to take a single bed and some basic furniture, although it does tend to get used more as a utility for the large freezer and laundry area, with a very nice slate tiled floor. We were lucky that it was almost a tandem length garage to begin with, but at least this way we have mainained the storage space and it would only take a couple of days to convert the rear room into a bed-sit room simply by re aranging the contents and furniture.
Sorry if I have made this a long post, but having been through a similar situation myself, my advice would simply be dont do it.