Also make sure if it was newly renovated they didn't lipstick the property with carpet,paint, replace door knobs etc.You want big items like heating,a/c, roof, plumbing, electrical,etc. to have a lot of life left on them.If you buy based on inflated rents and then have flat to depressed rent in coming years, higher turnover and make ready costs, and high capital costs for large ticket items you could lose a bunch of money.Make sure the property insurance policy is not a master one insuring multiple properties as the owners policy could be low in cost compared to what you will pay.

Our current rental is located in a depressed area with low-no appreciation, very low home prices, but average rents (for the area.)  

I had an amazing christmas with my wife and 2 little girls, and naturally I felt depressed once it was time to get back to work.I realized I needed to do something about that.

I now have it priced at $94.9kIt is in a small town in North Carolina over 2 hours from where I live currently where the real estate market is pretty depressed, and I was thinking that selling the house now would keep me from having to invest in additional repairs and maintenance as the housing market continues to decline. 

As for avoiding a market that has a depressed outlook in the next 10-15 years, I have to ask again, how can we think we might know what's going to happen in that much time?

Usually it's in an economically depressed area with distressed homes.

With oil & gas prices depressed, Oklahoma may start hemorrhaging jobs.

I cannot speak to the specifics of the above deal, but in general deals in Norwich might sound like "steals" but there is a reason you can find "12-caps" in Norwich, CT: 1) Norwich is a depressed market, and I believe it's declining in population. 2) It's easy to underwrite deals in Norwich as a 12-cap, because showing "nationwide averages" on the pro-forma for line items (e.g. vacancies/bad-debt, repairs, reserves, turnover costs, etc.) might allow you to achieve those numbers. 

This is due to the steel mill running at a reduced capacity and a slightly depressed economy.  

I personally buy in psychologically depressed areas, that I see value and other's don't.