Hitting the side of the barn
First, unless your rifle is a complete wreck, you'll find that as you grow accustomed to the sights, you are going to see a dramatic improvement in your results. Dave Emary of Hornady, a few other guys and that included me decided to try several types of ammo and loads through a variety of K98's some years back. We all shot off a bench so we were doing things the same way.
Depending on the ammo, somewhere around 15 different K98's, 6-7 shooters, ranged from a high of about 6" group spreads at 100 yds-5rds using surplus-Yugo and other military ammo similar to what the rifles were built for down to 1.5" 5 rd groups with hand loads. Consistently. I bump into quite a few people at the range with K98's who agree that the rifle just shoots well, IF one first acclimates to the sights.
I shoot for pleasure only and aside from some S&B 196 gr ammo I have (which shoots high but accurate), I use the SR-1 target center which is a little over 6", use a base of the bull hold, and shoot Hornady 150sp, Hornady 170rn, Hornady 195sp, and Sierra 175sp. All of these shoot below the military ammo to the extent that I stay pretty much in the 10 ring-not always. So if you load or get to loading, you'll be pleasantly surprised at the kind of groups you can get.
The top target is Hornady's 150sp, the bottom, Hornady 195 sp.