If you set these two scenarios up with ROE being your comparison metric you can then run a sensitivity analysis on rates to see how it affects your decision.

Others have pointed you toward ROE and advice for estimating future rents.For future modeling of low income rentals, the most difficult thing for me to estimate would be vacancy rates.

@QUINCY ROE welcome to the site.

ROE & cap rates are always a bit variable, but GRM is straight forward, even if lacking in sophistication.

They appealed and the appellate court overturned the decision.

Be sure you can withstand drops in cash flow, keep reserves, and as others said, look at the difference between ROE and cash flow returns..

For example, do you look at what your profit and ROE would be if your expenses sucked up 60% of your revenue?

Example $7K yearly net rental income / $200K equity is only 3.5% ROE.  

It's good to know what your returns might be with a plausible deviation from your expectations..http://www.biggerpockets.com/forums/88/topics/109330-using-range-of-expenses-in-your-profit-roe-estimates

I wrote a blog about it the other day.. curious about your thoughts..http://www.biggerpockets.com/blogs/4579/blog_posts/32645-if-ca-h-is-king-then-leverage-is-god---loans-cash-roe-roi-and-risk