Between 2006 and 2008 over 1200 rental units were delivered to the campus market by large development companies. Subsequently, rents have declined in the area around West Campus over the last few years. Several hundred more units will be delivered this year as well (21 Rio, for example, is a new tower with ~ 200 units).
All of the new construction leads me back to my favorite area for rentals: North Campus. I used to own investment property in this area for several reasons: North Campus is quieter than West Campus (most of the fraternities and sororities are West) and easily accessible to the University. Hence, it's very popular with upper classmen, graduate and law school students which tend to do less damage to rental property than lower classmen (few parties, etc.). Furthermore, zoning in North Campus limits new development which maintains a lid on supply.
Specifically, I like the areas along Duval or Red River because you can catch the shuttle or No. 7 bus to Campus. I would opt for a 2-2 because the cash flows tend to work out more favorably. I would avoid any complex with a pool because it causes the HOA dues to be high and cuts into profitability.
Before buying, make certain to thoroughly review the HOA's budget and reserve fund, as many complexes in that area fail to maintain a sufficient reserve for big ticket items like roof replacement, exterior painting, etc.
There is a great complex at 32nd and Duval as well as one at 29th Street. Both have low HOA dues, minimal maintenance and good proximity to campus which make them easy to rent. I'd remain south of 35th street.
View UT Market trends here: http://www.slideshare.net/TaylorRealEstate/ut-metrics