Increasing your payments with PMI, closing costs, and higher interest rates means that you’re buying your VA eligibility (your down payment amount) at a huge cost.

If we can increase our buyer demographics we'll likely see time on market drop by 80-90%.  

Although still rare, some of these duplexes are now coming with impact windows, which further lowers your insurance and increases storm protection, so this may be something else to look into.

I "could" make higher returns on my equity if I borrowed, but it also increases the risk.  

The point of making money is to increase the quality of your life.

@Josh R. there is another option, one that would raise you're ROI too infinite, eliminate that finance rate too 0%, and via reduction in $-expense, increase cash-flow. 

Additionally, the property is strategically positioned within a larger development vision, which includes building 12 patio homes and two duplexes on adjacent land, further increasing the long-term value and income potential of the investment.

Rent appreciation also tends to be higher and cash flow tends to be much better over time as rents increase more steeply, but it may take several years to spin off positive cash flow as opposed to right away.

Has anyone ever tried to increase the size of a PEMB?

Is it worth keeping the house and increasing the rent to $1750 or should I sell in the market that we are in?