For a new real estate investment, how should property value appreciation be considered when deciding between a single family home/condo versus an apartment complex?

It should not be considered at all, whether for a single family home/condo, apartment building, or any other property. If a property has inherently appreciated in value over time, fine. If it has not, that's fine too. No one should not buy property, either as an investment or otherwise, with any expectation that it will appreciate in value over time. In order for a property to appreciate in value, it must be situated in a market where values are rising faster than annual inflation (figure 2%-3%) and counter the forces of depreciation of the improvements. That's the baseline to measure appreciation in value, which has historically been poor compared to other investment vehicles. Whether you should buy one type of investment property versus another depends wholly on the properties, prices, market, your circumstances and your goals, not to mention a few dozen other things. Generally speaking, it will always be preferable to operate a small rental apartment building (sometimes called a "taxpayer") as an investment rather than a single family home or condo, all other things being equal, since they are designed to produce income as an investment property.

Thanks for the A2A So this is going to be one of those odd times I disagree party with Bruce.  My major group of investors typically find properties to invest in that both have a cash flow and will also appreciate in value.  These properties are called Value-Add.  Ideally you can purchase the property and then increase rents, decrease spending or improve the property to be able to add value.  Now we do not purchase a property with an expected goal of appreciation but with the knowledge that if we are to manage the property better than the last owners and increase rents or occupancy we will increase the overall price given with what we forecast the CAP rate to be at the end of our hold time per the proforma.   While we shoot for a going out CAP rate the chances of accuratlly predicting that are difficult and are sometimes  nothing more than a wish and a guess.    The unfortunate thing is that apartments and homes are difficult to make the best returns as they typically trade at a lower CAP rate, there isn't as large of a spread in CAP rates, and are much more dependent on the housing numbers.  The better bang for the buck if you are looking for a value add property is going to be in retail or possibly industrail properties.  The key is finding a property surronded by succseful or full properties showing there is demand for space and finding the one that is empty.  Once you determin the cause of why this one is empty compaired to the others you fix that and you are able to increase the asset.  These are typcally very labor intensive and/or capital intensive but you are looking at a going in CAP rate in the 9-10 range and can sell them closer to a 7 depending on the market.  Keep in mind as well the level of risk is increased and so is the required knowledge.  We are are a very niche field of investing and it often isn't very pretty.  We looked into branching out into multi-family with our model but for my investors we didn't see the returns we wanted as the multi-family CAP rates are lower with out the spread that we see in other product types.  If you are okay with CAP rates that seem to remain very constant finding a property you can increase NOI is possible and can be rewarding.  Would I look at a property that is looking like it can apprecate in value over a 5-10 year period due to economic factors, sure.  However I would not purchase a property solely on the speculation of increasing economic facotrs that will allow my property to beat inflation.  However if there are factors I can fix to make a propety increase in value and there is a possibilty of econimic increases to property value, then this is something I will spend a little more time seeing if the risk/ reward is worth the investment.  Short answer is I will not caluclate an increase in property value in my proforma (other than inflation) but if I have two properties that are similar and one has the possibility to gain value due to increased property values then this is going to sway the decision.  It is this point where the facts and the estimation come together and can either make or break an investment.