The first question has to be: Are you going to manage it yourself? If so, are you confident about the process? Secondly, if you are after income you need to find something that offers a good margin, not just breaks even. Break even is CA talk for hoping prices continue to increase. Expect to pay up to 50% of income on expenses (property manager, maintenance, insurance, HOAs, vacancy, lease fee, advertising, some utilities, property tax). In other words, you need a rent ratio of about 1 (for every $100k invested aim for $1k monthly rent). To achieve this you need to be at the lower end which as someone has pointed out is higher risk. Note that higher risk can be very high risk = zero gains. A good property manager is worth his/her weight in gold. Spend six months educating yourself on investing in RE before taking the plunge. I doubt you will find what you are looking for in SD. You may want to consider looking further afield. Bear in mind that inventory is still low in many parts of the US.