It can increase your capacity to pull off certain deals.

Buyers usually want to purchase on today’s value while sellers often want to use future potential of the property (“current rents are below market” or “room to build an additional property”, etc) to increase the purchase price or likelihood of a sale.

That may increase your cost or limit the coverage you can get.The Year that the following were updated (either partially or fully) would be good to know:- Heating systems- Roof- Plumbing- electricalSome companies will not write properties with systems that have not been updated.As long as you are living there, the proper policy for a 1-4 family is a "Homeowners" policy.

As an example, our request for rent increase that was submitted in Sep 2023 has not been processed and may never be processed.

Anywhere that one can buy properties for under $100k is very unlikely to have the rent increases that you will need over time to create positive cashflow, or the price appreciation that you will need to make this a profitable endeavor.

And if rents continue to increase in the area, the cash flow could be closer to $300 per month if I refi in about 2 years.

ADU increase value less than the hands off ADU addition, but a developer is not a hands off ADU addition.Thanks

If you spend time learning how to manage well, your income will increase, you'll save time, and you'll maintain your sanity with the courage to expand.

Just make sure you are saving towards those slow months during the peak months, buy a deal at the right price (don't overpay just because its a turnkey STR or you think it will make more money than projected), and look into ways to increase bookings during those slow months with some marketing and operation tweaks. 

I like the cash flow and see the potential for increasing rents, but I’m hesitant about overpaying.