Hi K,
The best niche can only be determined by YOU! If there was one great niche that could work for anyone, everyone would be doing it.
You need to find something you know alot about, or are passionate about, or are INTERESTED in learning more about OR have problems with. This is important, since you will need to generate content and do research and if it's something you have no interest in it's just plain boring WORK! Also if it's something you are interested in it will keep you more motivated to do all the hard work that comes BEFORE the money starts coming in.
One way to think about it (I like brick and mortar analogies) is this.
If you were going to invest in opening a store - would a clothing store be smart, since theres a Macys and a Walmart right down the street? Or is there some cool and needed product you could focus on that a very targeted, loyal customer would love to be able to find? If you DID decide you REALLY wanted to open a local clothing store, then it would be much easier to focus on ONE type of product. Lets say bathing suits. But thats still pretty general, so how about PLUS sized bathing suits. So now (thinking offline to make the example easier) you have a very specific type of person you are target marketing to - not people in general, women. Not just women that swim but plus size women. You can be REALLY good at just finding great swim suits, the big malls don't carry and get a reputation and word of mouth because you FOCUS on one specific demographic.
On the Internet side, just using the example above, everything gets easier - ALL your copy and all your research is about that one product AND more importantly that one type of person with that specific type of problem.
How can big women find suits that they feel comfortable in?
NOT SAYING at all plus suits is a hot niche. Just showing you how drill down to a more specific part of a big broad product category.
OR think about problems, not products. Do you have a health issue you are always trying to find help or new solutions for? You know alot about it and others are also looking for help? Or some other type of problem? This can be very lucrative, BUT the most common problems like weightloss, acne, back pain are all very competitive. So again drill down to find a sub niche or more specific problem.
So you need to do a self inventory, make a list of possible niches then do keyword research. The niche forum has tons of resources and ideas to help you.