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Porch with BBQ
Porch with bricked BBQ
Porch with 1/4 wall
SMALL ROOMS: clear table, day beds no backs so eye can see adjacent space and curtains mounted near ceiling to draw eye up
use area rugs instead of walls to designate different use of areas
Built-ins, like this bed, take up a smaller footprint than freestanding pieces of furniture. And because the furniture is part of the surrounding architecture, it takes up less visual space as well. Plus, you can get the benefit of extra storage.
No space for a guest room? Consider a Murphy bed. There are a lot of really sophisticated designs on the market now. And while a good one isn't cheap, it would still be cheaper than adding a guest room that would get used only a few times a year.
When furnishing a small space, don't feel limited to small pieces of furniture. The pieces in this room all sit atop exposed legs, so they seem to float above the floor. And when you can see the suface underneath the furniture, the space feels larger.