Complex sentence: A guest house called "Sagar Mahal", overlooking the lake is now a heritage building, which was the summer resort of the erstwhile Nizam is located on the banks and has the best view of the lake.
Split into simpler sentences: A Guest house called "Sagar Mahal", overlooking the lake, now a heritage building, was a summer resort of the erstwhile Nizam. It is located on the banks and has the best view of the lake.