It is a 2/2. The first year “cash on cash” return is about 3.5%, including principal reduction it is about 8%.
I estimate conservatively rent will rise 15% in 5 years and HOA tax and insurance will rise 10% which will produce a year-5 cash return of 5.4% and total return of 11.8%.
That then has to be adjusted up to account for the fact depreciation allows the rental profit taxes be deferred, or not paid at all if I die owning it and the basis readjusts.
Ultimately I think I may not hold it that long as I think we will have another bubble and I will sell it then.
