Is it best to simply increase rent by a fixed amount (e.g., $700) to cover this, or are there other strategies for handling utilities in this situation?

I would want to make improvements to all units and increase the rent to market value when the renovations are completed.

Supply and Demand: When buyers outnumber sellers, prices and rents rise.Population Growth: Cities with significant and sustained population increases are more likely to see long-term rent growth.Job Stability and GrowthA property’s value is tied to the jobs in the area.

After you've completed some updates & have reviews start to increase your rate.Feel free to reach out anytime if you have questions :)

A tenant now enjoys these enhancements at $1400/month, showcasing the property’s increased value.

It is amazing how many times I have seen the cash flow represented as rent - PITI and to compound the issue they did not realize the ADU would increase their property tax.   

Disallowed losses under wash sale rules increase the cost basis of replacement securities, potentially reducing future taxable gains.This post does not create a CPA-Client relationship.

My spreadsheet also includes FMV of every property so I can monitor appreciation, year over year comparison of tax & insurance increases, current rent & last increase & last amount, etc.

When I run the numbers based on these rents, the property operates at a negative cash flow.If I increase the studio's rent to $1,400 per month, the property becomes cash-flow positive.

I increased my Heloc on my primary.