Depending on your investment profile, one way to evaluate a strong investment is to see if it's cashflow positive. In it's simplest form, after all your expenses associated with the property, does the rent leave you with any money left over?
In today's market, my opinion is that to achieve a position of cashflow positive, you either have to look at multi-family residential properties, or have a very large downpayment. Something like 30 or 40 percent. For most people this is not possible, and for investors, this is not desirable. Most investors don't want to tie up a large sum in an investment, they want to buy it with as little money as possible, with other peoples money, ideally.
Single family residences, be it apartment style condos, or a townhome, or a detached, are simply selling for way too much money these days, certainly more than any reasonable amount of rent could cover, especially when you factor in property taxes, insurance, condo fees and potentially a LOC interest only payment.
Multi family residences, triplex, fourplex I think could certainly achieve a cashflow positive position with only 20% down, and would advise investors to consider these as a way to minimize your risks. Though I know some first time investors have concerns with the repairs and management associated with these.
Are you ready2move?
Buying and Selling Residential, Condominium and Investment real estate in the Waterloo Region since 2008. Oh, and also Ottawa! :-D