+1 on a futon with a proper futon mattress, assuming guests aren't too frequent and won't expect hotel quality bedding. Definitely would do this over a sofa sleeper which are heavy and have a less comfortable mattress (IMHO). ... Buy whatever sofa you want, and if the mattress is uncomfortable, toss it and replace with one of these: DynastyMattress 4-inch Cool Gel Memory Foam Mattress for Convertible Sofa & Couch Beds Queen ... More on bogleheads.org

Please Dear, no futons. We all are over our dorm days. I have suffered on a futon myself and would not inflict that kind of suffering on someone else. Unless you just really want to target large groups of 19-year-olds as your intended guests. In that case, the cheaper the better! Don't forget some empty cardboard boxes as side-tables. More on reddit.com

Honestly - a Murphy bed setup is much more comfortable if you can get past the old Muppet movie tenement scene jokes. More on reddit.com

If you want to continue have a large sleeping area, get one of the day beds with the 2 mattresses. Most of the daybeds come in 2 versions. The ones that come with one mattress are simply a twin size daybed with storage. However, the versions that some with 2 mattresses are a twin size daybed that can be opened out to almost a King size bed and pushed back in daybed mode when not sleeping. There is also drawer storage in the bed as well for bedding, clothes or whatever. The HEMNES is probably the best constructed of the daybeds, but there are a couple of other choices. As someone else noted, these daybeds are frequently available on Facebook Marketplace; but if you go that route, you should get new mattresses to avoid the possibility of bedbugs and various allergens. From what I’ve read in other posts, I would recommend a bunkie board as well. The main issue I’ve seen people post about (only occasionally) is breaking a bed slat when the bed is opened (they put their knee on the bed and it pushes into a gap between slats and breaks them). The other issue is not being able to sit on the daybed like you do a sofa with your legs touching the floor, but you could get large bolsters to place along the back of the daybed which would support your back when the bed is in daybed mode. They would also push your sitting stance up sufficiently to have your feet on the floor when sitting up. More on reddit.com