With such low rental yields, the return on investment (ROI) and cash-on-cash (CoC) return are negative when factoring in mortgage payments only, not including any other factors.In this market, it seems almost impossible to make a profit using traditional rental property investing strategies.

I’m presuming profiting as well.

The one pro I see is it’s pretty hand off and can still make a profit.

Then it will become a profit center.

Profits do not justify their effort even with the ADU addition in this case typically not being hands off .Here is a list of things that make ADU additions a less than optimal RE investment but the value added and starting with tens of thousands negative is a big one that needs to be well understood. 1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

You often only have to worry about tax upon the profitable sale of an asset. 

I understand the argument that the general public should not be restricted from investing in “highly profitable” deals, but what tends to end up being offered to unaccredited, unsophisticated investors in the “junk” end of the investment spectrum. 

Once the renovations are complete, the property might appeal to owner-occupants or investors, and you could potentially recoup your costs and free up capital for a more profitable deal.

They cost $800k+ though but well worth it when want investment that actually performs profitably.

Or are interest rates, rents, etc. still out of whack and making profiting difficult assuming now as time zero?