Buy in area becoming more popular- take my chances?

[Jennifer White]

I've lived in the same area for about 5 years and we currently own our home.  The value has increased ~ 80-100k in that time frame.  My husband and I are looking into investing in more properties in the same area as we are seeing an increase in apartments, townhomes, shopping centers etc.  However, finding deals has been a challenge due to the popularity of the area.  

I am wondering if investing in a property that may not be the best deal right now but would still provide us with monthly income of ~$200-400 per month, with the potential for continued growth in the future, is a good idea?

I guess my main question is do you recommend paying a little more up front and bank on the market continuing to improve?  Or am I possibly shooting myself in the foot by hoping it will continue to trend up like it has?  I know the future is unpredictable but would just like to know some people's thoughts or strategies they've used in the past.

Thanks for the help in advance!  This would be our first rental property purchase with hopefully more to follow.