I don’t have a lot of experience with rentals, but here’s what I’ve learned. I have a rental house (3/2) in San Jose and a condo (2/2) in Santa Ana. The 2/2 is in a complex with about 300units. HOA’s are a pain in the ass. It’s my first experience with them and it’s been non-stop aggravation. If you can afford a multi unit that you own the whole thing…. that’s the way to go. Otherwise, Id stick to SFH’s. That said, I’m making about $400/month (not including vacancy) on it. It took me 3 months to rent it at first. The tenant is good, but still has to be called every other month to remind them to pay the rent.

The 3/2 in SJ was my house for 5 years before I moved south. It’s been rented for 2 years with a new tenant after year one. I loose about $100 a month, including paying a property manager up there. Again, tenants have issues here and there, and checks “get lost in the mail” so it’s a little bit of work, but nothing serious.

The one thing you need to think about is most non-owner occupied loans will require 25% down. I’m not a broker, so I could be wrong, but I was told that you can get hit hard or not get loans if you can’t come up with that. Also, form an LLC. It can help in many ways. It protects your personal assets from a suit related to the property and it also allows you to be the “manager” instead of the “owner” to tenants. They write checks to Acme LLC and your just following Acme’s policies. I think I’m a very reasonable landlord, but it makes a difference in dealing with tenants.

I’m not sure how useful any of that was… but best of luck.