Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

In fact it may actually complicate litigation in the event a claim were to arise while adding additional insurance expenses to your real estate operation.To explain why this is the case I’m going to ask one very simple question: In the event a tenant dispute, premises liability, or any other claim were to arise, what prevents the Plaintiff’s attorney from merely listing your wife who it seems is the property deed holder in your fact pattern as a Defendant?

If you had to pick one state with the highest change of exploding insurance premiums over what they are now, other than maybe CA, it's Florida.

Lastly as an illegal unit it is  huge liability if there was a trip and fall claim, fire etc your insurance may not cover.I recommend renters insurance for whoever lives there is mandatory to add another layer of protection. last option not considered is you living in the bonus unit to have a free place to live with minimal risk 

Also, lenders usually require a licensed contractor, bond and insurance. 

We have been able to rent it out with zero vacancies for $3,300 month, with the mortgage, property taxes, insurance and other expenses totaling ~$2,900.

It's also good for insurance and legal reasons, because you will need to indicate every adult and all persons, as well as details (like children, pets, etc.), on the lease.  

., 900 SQ FT is TINY, I live 10 min from there and will not touch it .36k gross so about 20k net, ( MAX ) all in 375k, TERRIBLE deal 4% net , again terrible   Actually, the net will be less, Insurance will be about 10k, On top of the 6kish in taxes, and other items. 

I suspect a lot of your buyers to most of your buyers are getting HML  Loans in that case title insurance is for the amount of the loan and if the loan included our fee then they are insured..

You're better off just getting better insurance.