What are the rents of a condo in your community vs comparable apartments in the area? 

The first, when I informed him it was priced $75,000 over market value based on the comparables, he said 'Since its a lease option, someone will accept it.

You have much more leverage and control with month to month compared to a term lease.

My current rate is 3.625% and I'm concerned I won't be able to get something comparable with the rising rates.

First off, Gilbert is approximately ~$150,000 cheaper in median home value compared to its Scottsdale counterpart.Downtown Gilbert has changed dramatically in the last couple years.

That would add $700 back into your monthly cash flow and turn it from a negative cash flowing property (-$257 per month, per your analysis), to about $450 per month in POSITIVE cash flow.Also, water & sewer and insurance estimates seem a bit low, but that could just be the area of this property as compared to my area. 

The only true way is to pull up comparable sales and analyze the comps and condition of the property. 

Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers.

I like to compare the cashflow I would get from holding the property for a period of time vs what I would get by selling the property. 

However with it being a small multifamily, your comps are going to be ran very similar to comps that are ran for any single family home, comparing prices paid for recently sold homes that are comparable in size, style and location.