I believe she has tried to identify tenants that could be house managers and reduce the rent for them. 

You want to find a way to reduce the possibility of turnover because that can cost you money that will typically take a while to recoup.

Try to get the city to reduce the taxes.

Next is to determine if you can increase the NOI through enhancement in the property, reducing expenses and raising rents which will ultimately increase the value of the property.

We are using the income from the rental to support our living expenses but some months we still need to put some expenses on credit cards which stresses me out.

My ultimate plan is to sell my lot to a developer who will likely construct a multi-unit- the lot is approximately 10k square feet and zoned for multi-units.The benefit is that they are paying the cost to build a new wall between the two properties, as there is no wall there currently.However, my concerns are (1) will this affect the future value of my lot- as the v-ditch encroaches onto my property approximately 12 inches, effectively reducing the useable square-footage of the property?

If the opportunity should present itself that a SFH pops up that I could house hack to reduce or eliminate my living expenses and save for another property, I've been considering doing that.

The utilities and so forth that you paid reduce your rental income but aren't part of the basis of the property. ie, they don't impact the sale price profit of the property.You probably should find a CPA that can help you sort all this out as it seems like you may need to file some amended returns to cover the period since you bought the property.

With RE investing you have multiple facets of gains (cash flow, depreciation/expenses (reduces tax bills), as well as long term appreciation. 

Your post really shows how a little bit of knowledge and planning can reduce the tax burden...