You have to adjust your expectations to match current reality, which includes higher mortgage rates, higher prices, more expensive taxes and insurance, more competition, etc.

I'm a Realtor with a couple properties listed in Boise, ID and a neighboring town for my investor/client that are currently rented as co-living or rent-by-the-room and getting killer income. (7.3% - 9.5% Cap rate) So far, every inquiry has been baffled by the concept of co-living or rent-by-the-room and immediately ask if they're being run as a halfway-house (which they are not).

I think your correct though folks have to adjust to the new normal and the interest rates they are not coming down like folks hoped for I think we are in for a run of years were rates will be more like the 2000s  6 to 7% and Owner occ in the 5s with Maybe some high 4s. but by the time folks wait for that prices will rise in the better markets.

I think Collin is being a little tongue in cheek with the Boone's Farm comment.I work with a local, large wine store, wait for their semi-annual sales when they compound discounts and buy 2 cases of each (white & red) for the largest discount.Basically I'm setting out wine that retails for $11-12-13 that I have paid $7-8 a bottle.  

I own a commercial unit, and I’m trying to determine a fair rental rate for the space.

Interest rates will not be low.

If you can get your direct deposit moved against your heloc right away, and then you do not have to pay bills instantly, you are leaving your idol funds offsetting a 7.5-8.5% interest rate.

And YES, far FAR too often I am seeing people stack up UN-realized expenses at a compounding rate, to give selves a false sense of "profit" on whatever monthly/quarterly capital there moving around. 

I'd suggest checking local Airbnb/VRBO data or using AirDNA to see occupancy rates and average nightly rates in the area.

In this era of increased rates, obtaining properties that will produce a good return are harder to find and often involve quite a bit of work.