Rent rates have increased so quickly over the last few years.

.- Put Upward pressure on real estate operating costs: Increased costs for raw materials and supplies, and the likely increased costs for labor involved in many real estate related CapEx and maintenance projects signal the risk of increase in costs for real estate operators.If there is no impact on near-term supply, a modest slowing of inbound (illegal) migration, more reason to believe that the cost of many goods and services will increase, and real reason to believe that inflation triggered by something other than an increase in the money supply (namely the cost of specific goods and services that are NOT housing going up, which comprise the CPI) will force the Fed to raise rates, this, on the whole, is not good for real estate investment returns. 

Some buyers enter these agreements without fully understanding the financial commitment, often influenced by overly optimistic advice.

This has left us with significant carrying costs and financial strain.

Without actually building the 3rd unit, would this new triplex eligibility increase my property's value? 

One thing I will say, and do with it what you will, if you are digging out of a bad financial position I'd suggest RE is not for you now. 

You can earn strong appreciation but also lose a lot as the entire state becomes increasingly hostile to landlords.

Perhaps if your partner was a general contractor or handyman type there may be some merit there to reduce costs / increase profitability.If your partner enjoys deal sourcing, a better move might be for him to become an agent - so he could legally collect commissions from finding deals and managing properties for multiple people. 

The average increased from $326,908 in 2023 to $352,257 in 2024.

Prioritize your financial stability.