I don't really have a support system (hence i've been on my own since age 14) so I go out seeking opportunities on my own, and calling various people for advice. 

The government has strict rules on rent to own and the irs has changed the game

The vast majority of service members follow rules and abide by all the terms of their leases...but there are exceptions. 

Is that a true fha rule?

Rules of thumb like the 1% and 2% rule can be used for quick analysis but they are hardly ever accurate to actual numbers.

@Alan Feldman The general rule of thumb on commercial is also around 40-60%.

Stagnant economies that don't produce high paying jobs don't lead to increased real estate prices, so appreciation may be ruled out as well.  

Is there any way I can still use the 1031 exchange rules or do I just pay my taxes and buy a new place?

Being a RE Agent in 2001, I have a complete understanding that I just touched the tip of the Ice Berg in this game but good to know that I have a support system within this and other platforms.

Your other option would be to take a HELOC and use the money to buy a second property that has a better return to support your passive income.