You haven't provided all factors, but back of the napkin, I'd say what you have sounds competitive and fine.  

Alex HenriksenSome quick napkin math using the 50% rule:Assumptions: Selling price $194KFinancing: Non owner occupied, 25%down, 5%, 30 yearMonthly PI = $781Tenants pay all utilitiesNo big capital expenditures needed.Expenses = Gross rent *.5 = $2320 x .5 = 1160This leaves $1160 each month to pay your mortgage (PI), utilities, and yourself.Cash flow = $1160 - Mortgage = $1160 - 781 = $379/month.

Are apartments not being maintained in a sanitary manner? 

We typically do what we call "Value on a Napkin".

I know this is only napkin math, but as wealth building doesn't it actually represent more than a 1.3% return?

@Varun Parkash - I'd look at the deal and your goals this way (using napkin math and flat rents): You say that you want to purchase this home at $315,000 which would cost say ~$5,000 in closing costs.

I've had one split (from an overweight tenant according to the plumber) and another clogged because our tenant was flushing her "sanitary napkins". 

Take some notes on the back of a coffee shop napkin and do some hard listening.

HABITABILITY AND REPAIRSWarranty of HabitabilityUnder the warranty of habitability, tenants have the right to a livable, safe and sanitary apartment, a right that is implied in every written or oral residential lease.

Some rough back of the napkin numbers:Find a SFH, 4br+ for $380k or less.