But the danger is rent in areas that don't produce enough income to cash flow and property taxes that are absurd in my mind wiping out cash flow.

That is false security to the max.

With the absurd real estate market today in NY and NJ especially, I've been trying to get him to sell me the house for over a year.

Why would you take anyone's word here to be true or false vs the mortgage lenders who you spoke too?

This isn't relevant to the question of how much to charge for rent, but it's relevant in case one tenant wants to falsely claim that I discriminated with a rent increase or tenancy termination based on that.  

I don't take out for anything else since doing so gives the REI a false security, and a false negative on a property.  

He is driving up the desirability of his own bid by creating a false sense of urgency knowing that by doing so, the seller will accept their offer.

I think that is a disservice in general and people should do deeper analytics up front and assure that the number they arrive at for cashflow expectation is not a false expectation.

This is by no means meant to give a false reality of “cash-flow”, and I always recommend any investor factor these cost into their monthly expenses.

@Michael Seeker Great way to find information on owner to make offers, by the way you may or may not have a false alarm lien on yours,lol.