I'm afraid that the high probability of a lot of water won't make it a good candidate. 

Plumbing piping, hot water heater, etcHVAC?

Housing will cost more due to water and sewer development.  

I dig up all the information I can find(property taxes, sewer/water, closing costs, purchase price, everything.

Here are the particulars....House retail market price:  66K (I think it may sell for 60K)Repairs:  15K maxOwner mortgage left: 36,500     interest: 5.00%Monthly payment: 826.00Est Rent: 900  (minus PM fee: 90, minus water: 50)  ~760 profitWhen working to make the deal I knew they had a monthly mortgage and had one year left (I assumed at worse 2 years.) 

I’m unsure if I should sell it and put the money to OOS investment or hold it until the market is HOT again??

Water, for instance, I pay about $175/month to $225/month in NYC, and yet for a SFR in a neighboring town, in Nassau county, they charge $50 - $60 for a 3 month period, or $20/month.

I am in a hot rental market.

Average it out over 12 months and increase the rent plus 10% as "utilities included".It is preferred to spend the money to split the utilities and add second meters (hydro, water, gas) to be able to put utilities in the tenants names.

Water, garbage and heat paid by landlord, with steam heat.