I would be careful. The last thing you want to go is long 1 condo lot and then get hit with a 5K special assessments etc.. because 40% of the occupants are not paying.
Many condo's and townhomes are not getting FHA approval in this market. This is important because 70% of closings are FHA in my market (northern California). Additionally, the banks are sitting on a lot of foreclosures that have to yet come to market. This is an attempt to artificially stimulate the supply demand curve along with the governments tax credit program, which effectively will expire on April 30th. Having said this, there are incredibly good deals to be made, but you need to shop and be smart about it. I would stick with a single family residence and avoid the condo market. You'll need cash for an investment property but may be able to finance with approximately 30% down and stellar credit and debt to income ratio. Best to use cash if you got it. Full disclosure, I'm a Realtor so some on these threads think all Realtors are idiots.
As long as rent covers mortgage, repairs, vacancy, and that sort of stuff, its always good to buy. Dont worry about it getting cheaper. How much you really going to save if you wait? And how much income would you have lost out on if you didnt buy now?
As someone with extensive experience in both real estate and options investing, I agree that the above is good advice. Buy some quality dividend stocks and sell slightly out of the money calls on some of your shares. Do the same with some ETFs that are not correlated with stocks: TLT, DBA, GLD, FXC, RWX, MOO, BWX. If you are not familiar with options, read Mark Wolfinger's book, Options for Rookies, which is the best introductory text that I know of. If you choose stocks that are on the Mergent's Dividend Achievers list, you should have a good bunch of stocks for your retirement plan. If you choose shares that have historically increased their dividend, the dividends also tend to more than keep up with inflation, providing protection against the high inflation that is likely to arrive in the next few years. Stay on the right side of the 200 day moving average and you cannot screw up too badly. Real estate has so many unknown unknowns. I echo what was said above about HOAs and repair costs. Things you never anticipated in a million years come up. You really cannot know what you will make or lose on real estate, and you cannot get in or out of it easily.
I disagree, with inflation coming soon, real estate is a better option. Rents generally double every 15 years or so, so if you put down 100k on a 500k apartment complex its safe to say that not only will you have paid down a little chunk of that but you will have that extra income in 15 years, plus your apartment is most likely worth 1 million. Of course it might be a little sooner if their is lots of inflation, or later if the economy keeps sinking, but sooner or later, real estate goes up. As long as we are on fiat money, its a sure thing. Short term it doesnt always go up, but long term it does. So that 100k invested will most likely return 5 fold,plus the money that was paid off by the tenants. Where in the stock market can you make 10 times your money in 15 years? If that complex had gross rents of 5k per month, you would make about 500-1k per month in cash flow. So you need to make 17% per year in the stock market to equal what you would get with real estate, plus a stock that pays a dividend equal to what your cash flow would be on the apartment complex (which in this scenario would be 10% divys!!) That kind of deal would be very hard to find, not to mention, stocks can go down alot easier than real estate.
If you believe that inflation is on the rise and coming to stay, the best thing you can do is borrow money with a *fixed* interest rate. Even a terrible loan at 10% will be gobbled up with a couple years of 5% inflation. Spend today's dollars on something with intrinsic value, and pay it back with tomorrow's cheaper dollars. Even if USD becomes worthless paper, you can still charge rent in kind. "charming 2 bed/ 2 bath, close to thunderdome. only 2 goats, 10 cans of beans and 6 silver pieces per month" lol
notice the only real estate cheerleaders on ET are those who've never owned or managed real estate. their knowledge is based on what they're read. i bought a number of investment properties early last decade, and all those stories about tenants are true. you're gonna get sleaze bags who don't pay, those who raise 40 stray cats, those who burn down the kitchen because they fvcking cooked bacon in the toaster oven and went to do their laundry and forgot about it. i wanted to round up all my tenants and shove them onto the freeway blindfolded. i made money off my properties but it wasn't worth the ROI.
this is true. a greater percentage of dirtbags and deadbeats are renters because they don't have the money management skills to buy a house, especially now that the sub-prime market collapsed. here's a tip: don't rent to people over 40 because chances are they are so bad with money that's why they could never buy a house. college students are probably the best because they have parental and/or government aid.