COMING SOON - expected on the market September 30th. Rare Lower Eastport opportunity: spacious townhome with a separately licensed one-bedroom detached cottage and proven rental income. Enjoy the charm and walkability of Lower Eastport from this thoughtfully updated 2007-built home on a peaceful, tree-lined street just two blocks from the harbor and close to parks, restaurants, shops and the waterfront. The property offers approximately 2,300 square feet of combined above-grade living space, including the 670-square-foot detached cottage, plus an additional 800 square feet of finished lower-level space in the main residence. This unique configuration combines generous living space with an exceptional degree of flexibility rarely found in Eastport. Enter the main residence through a charming raised covered porch that overlooks the tree lined street. This home offers three bedrooms and three and a half baths, with a separate dining room, open kitchen flowing into the living room and out onto a covered porch overlooking the fenced-in backyard. Upstairs, the spacious primary suite overlooks the backyard and features a large walk-in closet and adjoining newly renovated bath. A second bedroom with its own private bath provides comfort and privacy for family or guests. Custom plantation shutters throughout the main and top floors add a polished finish and privacy. The finished lower level adds approximately 800 square feet of versatile living space and is currently configured as a family/TV room and third bedroom with a full bath, laundry, additional storage and private entrance to the back yard. At the rear of the property is the true standout: a stand-alone 670 square feet, one bedroom, one bath cottage licensed for full-time rental use. Extensively renovated in 2025, the cottage features new LVP flooring, kitchen cabinetry, full-size appliances and an updated bathroom. Most recently rented for $2,935 per month, the cottage will be vacant at closing, giving the next owner the flexibility to rent it, use it for family or guests, create a private home office, or accommodate multigenerational living. Since purchasing the property in January 2025, the current owners have invested more than $100,000 in improvements. A full list of improvements is available from the listing agent. There is no off-street parking, however, ample street parking is available at this quiet end of Eastport. The property's east of Second St. location is approximately two blocks from Horn Point and Spa Creek. This offers the best of the neighborhood's relaxed waterfront lifestyle while also remaining close to some of the best restaurants in Annapolis and just over the bridge from downtown Annapolis. A newer Eastport home, substantial finished living space, and a separate cottage with proven rental income of more than $35,000 annually - an opportunity that is difficult to replicate.