First rental property in small town 3.5 hours away

[Jessie Harrison]

I have my first rental property under contract, which is a SFH and a duplex (one floor of the duplex is completely gutted). However, the property is 3.5 hours away from my city of Houston in a small town of northeast Texas. Recent internet searches of the economy of this town point to the underwhelming economy, which is heavily tied to oil and gas. I realize this may sound like a bad deal, but I purchased the property for $55k (conventional loan, 20% down) and it needs about $20k of improvements to get 2 of the 3 doors ready for rent. Given that my mortgage, taxes, and insurance will be less than $600/month, I feel like this property could cash flow very easily if occupied (one unit could cover all expenses). Estimated cash flow of $400/month (including property management fees). Cash on cash return would be around 13%. That's better than S&P500, but is that too weak for real estate?

However, this small town has a high level of rental inventory on the market because it's once rapid growth and now weakened economy.  Should I walk away from this investment or take the chance and be in good shape if I can get it rented? I am so excited to have my first rental property, but maybe I should wait to find a better option. Your advice is much appreciated.