The answer: A single family home or duplex. While inventory of apartments and condominiums continues to be a problem for the rental market in that there are many to choose from, the same cannot be said of the single family home.
As property managers, the feedback we are getting from renters is practically unanimous- Give them a 3 bedroom, 2 bathroom with a yard and garage. The supply of available vacant homes is not as high as one might expect, given that most banks are not choosing to rent out their REO's. Over time, as the market bottoms out and investors come in to fill the gaps (already happening at the 200-250k range), we expect to see a noticeable spike in vacant home inventories, especially in areas where new development (less than 5 years old) has taken place (i.e. Roseville, Natomas, Elk Grove).
Depending on an investors long-term goals, a duplex or triplex may look better on paper, as they can be at or near positive cash flow as rentals. However, if the goal is future resale, nothing sells easier or appreciates better than a single family home.
Investors Choice Property Management (ICPM) is a small, service based management company with 100 single family units. Check us out online at www.investorschoicepm.com.