Here are the numbers as I see them:

Gross Rent: 1,300

Expenses: 950

This is assuming you self-manage so I'm not including any expense there. This is debatable but the way I see it your personal efforts to manage the property are yielding a profit. I'm also assuming a reserve of 150 per month and 5% vacancy.

You have a positive cash flow of 350 per month, which is 4,200 per year. If you were to sell, I'm estimating the equity that you would net after taxes and transaction fees would be about 85,000.

So your cash return on equity = 4.9% (4,200 / 85000)

Your yearly amortization is about 2,220 with a ROE = 2.6% (2,220 / 85,000)

Your appreciation is impossible to predict but 3% over time seems reasonable. So your return from appreciation might be 6,750 the first year with ROE = 7.9% (6,750 / 85,000)

Therefore, you are getting a combined return of **15.4%** on your equity assuming 3% appreciation.

Would I buy that as a rental? No.

But are the alternative investments compelling enough for you to sell? Probably not. It would only make sense if you are planning to take this landlording thing to the next level by acquiring properties in a different area with better rent ratios. If that's not in the cards right now, then I would hold onto this property because it's providing a great return based on the low-yield environment we are in.

EDIT: Messed up on the appreciation calc the first time.