Rental possibilities in this area

Okay, we are thinking about acquiring some SFH homes for rental in a nearby town. The numbers below are city (1st) and county (2nd) numbers.

Median Family Income $41,728 $42,663
Civilians 43% 44%
Armed Forces 0% 0% 0% 0%
Not in Labor Force 34% 32% 30% 28%
Education Levels
K-12 41% 41%
High School Diploma 26% 27%
College Graduate 6% 6%
Post Graduate 3% 3%
Real Estate Market Data
Total Housing Units 4,668 10,348
Average Home Price $92,137 $86,562
Median Rental Price $355 $355
Owner Occupied 55% 62%
Rental Units 33% 27%
Vacant Units 12% 11%

I am a little concerned about the unemployment levels, and the vacancy rates. There is a 1928 HUD home we are looking at, offered at $40K 3bedroom 1.5 bath. There is lead paint, and the removal of this and reinspection would be $1000. Average price for homes of this size are around $50-55K.
There are a fair number of homes on the market, so we are not thinking about flipping this property right away- as it could take months to sell.
Any thoughts on whether to try to flip, or rent this?

the real question is can that $40k house get at least $350-400/mn in rent ;otherwise your running a subsidized housing program.

the biggest problem I see is getting loans small enought to cover the purchase; or you could just pay cash, but not best use of equity.

in term sof the stats, the ratio between the median income and aveage house price is very low (only about 2); it seems that owner-occupied is only 62% (below national average).