The first one was a drug addict, who turned the apartment into a drug house.

Often, it involves criminal activity like using it as a drug house. 

Zubair Afzal nice to meet you drug dealer going slum lord.

I've heard there have been a lot of drug and gang issues from the city kids that PSU brings in by the bus load.

So I'm looking for some advice on which course of action you all would recommend:1) Keep the tenant (who wants to renew and has paid the rent), despite their maintenance issues and the rumors they're part of some drug cartel I hear from the neighbors... but get a new property manager or manage it myself if I can correct their deficiencies.2) Look for both new tenants and a new property manager (or do it myself since I did a better job vetting tenants to begin with).3) Sell it.

As for source of income, what if the applicant's only source of income was from selling drugs? 

Asbury had a huge drug problem for much of the 90s, and that has seemed to have cleared out,  although I suspect some leftover from that era exists.   

For all of the pain, arguing with tenants, drugs and screeching tires and loud music and social management....

. :) If drugs are talking and/or the property is being used as a home base for selling or other illegal activities?

So in other words you will probably be dealing with low income deadbeat tenants, probably a few drug dealers, a break in here and there, all in all a rental house that will be rode hard and put back wet.#2 Tax appraisal and Zillow are not good tools for judging the value of the property.From a straight cashflow standpoint the numbers may look good, but just remember you will have some pretty high expenses with a rental like this.