I personally believe that IRR is a far superior metric compared to commonly used real estate metrics like cash flow, CAP rate, and cash on cash.  

You need to look at warehouse comparables in the area listed for sale and solds to get a cost per sq ft.  

Consider vacancy rates and look at the historical appreciation of rent in the area.In Canada very few markets support good cash flow comparable to the United States, but we still have thousands of very successful investors who make due in every market.Do what's best for your future.

I thought with the beautiful reno and the price per foot I was asking compared to all the comps that it was a total win.

The money you spend on doing this might be recovered in one or two years compared to the increased insurance premium.  

We charge market rent and have upgraded finishes compared to the comps.  

So get to know the prices in the area that you are looking at and run those numbers comparing the local rents.  

His ROIs, especially compared to mine, are 'killer'. 

A concern I have is that there aren't a lot of four bedroom homes in our neighborhood (ie are we pricing our home out of comparable range).

I've had to switch insurance companies due to rate increases without cause (we've never made a claim), and it is a better use of my time to have an independent agent shop for the best option than for me to spend time dialing and comparing quotes.