If I purchased a home locally I’d have to ask well beyond the market rate on rent just to break even.

I financed this property using down payment funds from 403B and a local commercial bank. 15% down from personal funds. 85% down from community commercial bank. 3yr balloon, 20yr amortization, 7% interest rate.

As far as your next property, if you are already considering moving you will get better loan options + interest rates if you decide to live in the next property and rent out your current house. 

What is the interest rate on the mortgage? 

Increase the occupancy rate to 80% or higher over the next 12 monthsto increase the value.

However, other factors will matter, and the rates of taxation are different for different components of this Step 3 result.

My main concern is the interest rates being so high now as to whether what I'm hoping to achieve is really even possible. 

So this is creating more competition and more agreesive rent rates and/or concessions like 1 month free to get those vacancies filled.

FYI, we were able to get a 5.5% rate from their recommended lender with 20% down.  

Typically, the adjustments I see on appraisals for basements are more flat rate adjustments. 10k is usually the number I've seen.What stinks is that there are a couple of model types that have below grade space where the builder, I'm sure, was trying to lower the taxes by having it below grade so the county wouldn't count that space in the assessment.