Hi 6602marine. Great question! If you're looking for long-term appreciation plus immediate rental income, then single-family homes Scottsdale are at the top of the list for meeting BOTH of those criteria...BUT...you'll pay more (price per sq/ft) in EVERY zip code in Scottsdale for an average single-family home than you would in say, Laveen, Tolleson or Phoenix (85043).
Those three areas boast mostly newer homes in newer subdivisions (2000 or newer), and the prices are still very reasonable. You'll get a very nice return on your investment once the property is rented, keeping in mind that the long-term appreciation will likely be less than in Scottsdale, Tempe, Chandler or Gilbert.
If you'd be happy paying between $65,000 to $80,000 for a nice, newer, 3-4bed/2-3bath/1500+ sq-ft home that's only 5-8 years old (expect to do some rehab work-mostly carpet/paint/etc), secure a monthly rent between $850-995 per month (AND rent it QUICKLY if it's clean inside & out), then you should look at those areas that I mentioned.
The same size home in Scottsdale, while the area IS more desirable to most, will cost about 30-40% more and will be built between 1960-1970-ish. Don't get me wrong, that area is HOT right now too, and available inventory of homes is WAY down from what it was last year.
Chandler, Mesa, Gilbert, Tempe all offer good investment opportunities as well, but I just believe that you can save some $$$ on the initial investment and still get a nice rental return (CAP rate) if you look in Laveen, Tolleson, Phoenix (85043 & 85037).
I recently sold three homes to an investor (2 in Tolleson & 1 in Phx-85043) in the past few months.
The highest we paid was $70k and after some interior rehab (avg. cost is appx. $6-8k), ALL three homes rented within 2-3 weeks of being listed; the rents were between $850-900.
*These properties didn't come easy...there was a LOT of competition for these homes from other CASH investors and some 'owner-occupants'. It's all about timing and how your offer is presented that will help 'seal the deal'.
As for condo/townhome investments, there are some good ones out there but there are other issues to consider that would cut into your ROI (HOA fees being the biggest culprit). That being said, there are plenty available in ALL areas of the Valley; they range from $10-12k up to over $100k. However, In my opinion, nothing beats a nice single-family home in a good neighborhood for long-term growth and immediate rental income.
I hope that helps make your decision a bit easier! The bottom line is...and I think everyone would agree...this is the BEST time to invest in real estate in AZ in the past 15-20 years (if not longer), and with some solid research, good representation and a little luck, you'll find a great investment property that will bring you good returns for MANY years to come!
You'll get a LOT of varying opinions from the responses here on Trulia, most will be GOOD advice from solid agents that are active and in the market DAILY. Choose one to represent you and it'll make your life (and the buying process) a LOT less stressful and a LOT more profitable!
Century 21 All Star, REALTORS