I look at their rent potential and the rise in market value. This is real estate economics 101. But not everything goes up. There are slump markets, slump areas, and business cycles to consider. A lot of people got burned in the sub prime market, buying way over the home's real value. In the long term, we know real estate is a reasonable investment.
When investing, we must always look around the corner, really, see what is in the city plans, where will we be in 5 years, can I make the payments if I split with my partner, etc. Even try imagining what the value of the home could be in 5/10 years down the road.
I live in an area with a lot of development. The more they build, the less probably my home value will increase, with a rise in product offering. Nonetheless I love my home, so I won't sell. If I was in it for the money, I would sell now and find another place, but I don't, and sometimes these personal factors will weigh in the investment variable.