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No. of Recommendations: 4
What is your goal? Capital appreciation? Tax shelter?

As Trick pointed out, you can get the tax shelter off either of them.

However, it looks to me like you are preparing to pay retail for your rental houses. If you are willing to deal with the net negative cash flow (you have to factor in maintenance, vacancy costs, and turnover costs), then either of these might work for you. Over the long term, depending on the neighborhood, they should appreciate.

You are generally better off, though, to try to find a below market seller. There are usually plenty of them out there, if you have the cash and/or quick financing available. Wouldn't it be better to, say, pick up that 3/2 for 95K or so? Maybe not that particular one, of course, but you may be sure that those deals are available in your area.

Oh, I also agree with Trick that the 3/2 is a better choice than the 2/2. I NEVER have 3 bedrooms available; when one comes up it is invariably rented before I can get the crews through it.

OTOH, I usually have 2s available, in one area or another. Sometimes I have a lot of 2s available.

Curiously, I own a couple 4s and one 5. Those are harder to rent than the 3s.
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