Which of the following is more suitable?
Where is my apartment located?
Where is located my apartment?
Only your example 1 is correct.
The verb "to be located" is the passive form of the less common verb "to locate" (in the corresponding active sense of deciding upon placement), so it is indeed a verb phrase, and your instinct is correct that it requires inversion when phrased as a question. However, when inverting word order to form a question, as in example 1, only invert subject (apartment) and helping verb (is), never the main verb (located).
However, the answer to the question, which is not inverted, would be constructed as
Your apartment is located here.
Where is she going?
You would never ask,
Where is going she?
But you would answer,
She is going there.