This is a lot more complicated question than it seems at first glance.
How much hands on do you want in this "investment"? Or how much time and interest do you have in being a hands on manager? Doesn't matter if it is rentals, day trading, or selling ping pong balls, you need to define how hands on you want to be to start with.
I have several buddies who are day traders and they are pretty much part time on the computer studying their investments every day, including weekends. They get by, but they have tight months and they have good months, but it takes a lot of their time. Rentals are going to be the same- are you going to be the one cleaning them every time somebody does damage, calls about a light bulb being out, or moves out and leaves a pig sty? Or are you going to hire a management company to take care of all of tha for you at a percentage of your income stream?
If you don't want the hassle, either buy a house that is undervalued, fix it up, and either rent it or flip it and move on to the next one by leveraging the value of the property with a HELOC. If that is too much trouble, get yourself a good investment counselor or stockbroker and let him handle the stress of diversifying your funds for the best return. My broker is a good hunting buddy who used to be on this forum and he has done a great job for me over the years. I don't know enough to do the trading myself and expect decent returns- I've tried and lost my butt several times. And I can't handle the volatile nature of certain investments so I need someone to hand off to and I keep away from checking up on him constantly. I've had bad brokers and you will lose your butt with most of them. But if you can find one you can trust like my buddy John, they can do a great job for you and you just sit back and watch your investment grow.
Of course, these are just examples, there are lots of ways to go with an investment like that, but sitting down with an investment couselor can help determine your priorities and a strategy.
