When I lived in a one bedroom apartment...I could still fit in a guest or two. One thing I always had was a twin size mattress cover that I'd use on the sofa to make it extra comfy and to help protect it. Twin Size Mattress Cover
I also had a full size air mattress that was easy to store: Full Size Air Mattress
I wish I'd had room to get one of these but I didn't have any extra storage space at all: Serta EZ Queen Bed with Never Flat Pump (THAT IS SERIOUSLY SOOOOOOOOOOOOOOO HOT!!!!!)
I bought a bed in a bag and kept everything in the bag it came in that was for the sofa or air mattress. I kept an envelope sachet in it so that it smelled all good and stuff when you pulled them out: Lavender Scented Envelope Sachet (I buy these at like TJ Maxx or HomeGoods. My current favorite scent is Mulberry and I always buy them all when I find them. LOL!)
I stored the bed in a bag "kits" in the bottom of the closet and just needed to pull them out when a guest was coming over.
Once I'd made their "bed" I put a basket (that I kept in the linen closet) with guest toiletries on a TV tray by the "bed" just in case they needed anything. Kinda like this one:
And they had everything they needed.
I swear...folks always said my sofa was the best sleep they'd had in a while. LOL!
If a guest knows you live in a spot with limited space...they aren't expecting too much so when you do little things like this...they really feel welcome in your home knowing that you were prepared for them even with the little space you have.
Sofa beds are smart ideas if you don't plan on moving anytime soon cuz BAAAAAAAAABY...Them joints are HEAVY! LOL!
All-in-all it's just about making the person feel like they are not in your way and that you're happy to see them.