If you add a bath it may trigger to re-assess your property tax, and the increased amount may not be justified from your rent (especially if you own this property for a long time).

I want my PM to make a profit, but I want that profit to come out of the profit I get when they've increased my revenue and lowered my expenses and I want to understand exactly what I'm paying for, how much, and why.

Plus my income has increased 16% since that original approval.

Find a local manager in your area and offer to take them out for a coffee or lunch in exchange for a Q&A session on the pros & cons.  

Instead of trying to utilize the remaining $10k on acquisition of property #2, could we make $10k worth of repairs or upgrades to the first replacement property (roof, Kitchen etc) that would make it more attractive to a tenant and/or increase the value?

And if I continue to rent, rent will increase at least 100/mo each year.

And if I continue to rent, rent will increase at least 100/mo each year.

Agree on a price slightly higher to account for market increase.

This fixes the rate, but also coverts the loan into an installment loan so your payments will increase and you will no longer be able to draw on the line of credit.

When I add appliances, AC units, new roof and a number of other upgrades I would expect to see an increase.