I haven't did it, but I hear you get experience for getting the pirate captain to admit you. Im not sure.
What I would do, kill the mage and get his spell book and experience, go to the house and kill the monsters outside the house, and use the wardstone to open the door, then head back and get the pirate captain to admit you for extra experience.
Then when you exit it later on, rekill the new stuff outside the house, and THEN kill the pirate captain for more experience.