This question is more complicated than it might first appear.

Rental demand is a function of the asking rent. The higher the rent the less demand there is. You also have to consider the price you have to pay for a house for the rent it can achieve. I suggest you start by trying to determine your tolerance for tenant risk. The better neighborhoods have lower risk but also have less return on rent. If you can take a lot of risk, your cash flow might be better but the property will tend to appreciate at a lower rate when the market returns.

Mainstream areas like Natomas and Elk Grove are middle of the road while Folsom and El Dorado Hills and Roseville are higher end areas. The lower end would include a fair amount of South Sacramento.

You can check out our rent suvey at our website at http://www.HomePointe.com and click on Owner Services to access the surveys.