Contrary to most business lending, the REI industry has a lot of "non-bank" lenders that provide attractive loans that can lower your cost of capital and improve your profit/cash flow. 

It is your first year when you get the major tax savings windfall due to cost segregation and bonus depreciation.

When you took in the increased cost of the build how did you arrive at that percentage?

In southern CA, even garage conversion ADU additions are typically costing more than the value added.  

Ignore the $1,250 per month because that's your cost of housing, if you didn't pay that on the home you'd have paid that in rent so that's a non factor. 

Namely, that if a tenant (in this case accompanied by a whole family) ends up stop paying rent and I would be on the hook for both covering the mortgage and dealing with open ended legal costs and time.

I own several hundred rental units in other states, otherwise I'd join you in helping cover the costs.

I'll throw in my 2 cents on common differences I've seen in my career:CDFIs - Because of their subsidized financing structure, they have the ability to be a low cost lender (and sometimes provide grants).

@Tiffani HollisFor a long-term rental, I’d avoid used dishwashers entirely—repair costs and reliability issues often outweigh the savings.

But I would charge the extra 3% to cover my costs.