As mentioned, I've found that apartments/condos somewhere in the $200,000 to $250,000 range and duplexes in the range of $350,000 - $500,000 is the sweet spot for good returns without excessive hassles. My target is for the net income to be in the 5% to 6% range. Choose a cheaper unit, like an apartment for $100,000, and the income may seem superior, but the advantage fades when you consider other factors: the properties (and their tenants) have greater delinquency, more frequent need of repairs, and greater turn-over -- things I try to eliminate -- but perhaps nore importantly, these units are typically in neighborhoods with much less appreciation. At the other extreme, apartments over $500,000 tend to have lower net income; althought they can be rented for more money, the condo maintenance fees and property taxes are disproportionally higher.
The Sweet Spot in Choosing an Apartment for Investment
by Ernesto R. Martin