Principal balance currently at 314kProperty Details: It's essentially a "2-in-1" property, with the main unit rented out for $1,900/month and an attached ADU bringing in an additional $1,200/month.

Additionally, the house is 25 years old and could use cosmetic updates to increase rental appeal.

As JD said, the tenant must list the landlord as "additional interest" on the policy.

This can put a significant strain on your finances and cash flowThey also often require a large down payment themselves and may have a strict repayment schedule that can be difficult to meet, especially if there are unforeseen circumstances or delays in renting the property or generating income from itIn addition, relying on this type of loan may expose you to higher financial stress and the possibility of default if you are unable to meet your loan obligationsThe final decision depends on your overall financial situation, risk tolerance, and your ability to manage the associated costs and obligations

Because of the additional income I am producing through the consulting business, I am afforded the opportunity to invest money in real estate.  

Incorporating a washer-dryer hookup in the main house could be advantageous.This addition not only increases the convenience for potential renters but also adds value to the property itself.

Either way it would be a grey area, selling a house with a different amount of units/bedroom/bathroom seems extreme though. its an auction site, I have seen auction sites miss the fact there was additional lots in a sale.

FHA now allows us to count rental income from an ADU (additional dwelling unit) to help borrowers qualify.

In addition, due to them being eligible for conventional non-commercial financing they typically have lower cap rate than 5 units and more.  

This would depend on whether your property is overvalued by the tax assessor and in turn you are paying additional taxes on that additional valuation.