is there a max threshold when increasing rents (not referring to rent control areas)

[Mel Rosario]

I want to invest in beach communities.  when I find a property, do the math with a 30-40% down, I barely cash flow, break even, but mostly will pay out of pocket.  Ways I try to cash flow is a higher down payment, but there goes all my investment money, or raise rents, but compared to sources like zillow and property managers, the new projected rents are so much higher than surrounding rents, I can't make an offer for fear of having the place unrented or rent it at market rates and pay out of pocket. HOWEVER, these places still get sold, how do they make money, let's assume they are investors too.

ex:  550k 2/1 900sq ft/5000 lt, 5 minute walk to beach, will get 1750/mo based on community surrounding rates.  dropping 30% down, mgmt, trash, insurance, mtg, will make my pockets bleed by about $200/mo.  Based on numbers this is a bad investment, but these places still get sold to investors, at least that was told to my realtor from the seller.

Frustrated