I don't believe there is a correct answer to your question because it depends on a lot of factors, one of which is where you are in life and what your goals are. 

Taxes havent been paid since homeowner died so thats also a factor.

Which I don't want to do because then I lose all the flexibility I love about the HELOC to begin with.On the subject of the large minimum monthly payment, it screwed up my debt-to-income ratio and that was one of the factors that blocked me from getting the refi I'd had planned. 

@Davere Currie you can't judge an investments risk factor based on the quoted returns.

Of course, always factor in reserves.  

This is Not a “figure it out as you go” project......many times the short sale is doomed when the purchase contract is signed, not considering all the proper factors that a first timer would never have heard of. 

After getting everything stabilized and looking deeper into the actual numbers there were a multitude of factors that led us to decide to sell.

Of course, there are several other factors like, if you take over the payments what is the rate and remaining term, etc.Here's an example of a "no equity" property that we recently "overpaid" for:Purchase price $180k - purchased subject to the original mortgage which was a 3.25% loan with a PITI payment of $940. 

While I acknowledge that economic strength is just one facet of a good rental market, it is a major factor and I wanted to share what I've found (the details of my methodology and raw data can be found after the various rankings):Top 10 best economiesProvo-Orem, UTSalt Lake City, UTCharlotte-Concord-Gastonia, NC-SCChicago-Naperville-Elgin, IL-IN-WIDallas-Fort Worth-Arlington, TXKansas City, MO-KSLongview, TXLouisville/Jefferson County, KY-INSan Francisco-Oakland-Hayward, CABirmingham-Hoover, ALThere were two main factors to overall economic strength that I looked at – how diverse/broad the economy is and how many economic drivers (i.e. strength) the area has.

@Angelo Van - If you are looking for starting up advice, check out this post.For expenses to factor in your rental calculations, check out this post.