housing market moves in 10 years cycle. the recent cycle peaked some time in Oct 2007, if history is a guide, then I'd wait until 2012
First off...never buy a condo to rent out if it has HOA fees. Its just no worth it. Houses, apartments, things that you have 100% control over is best. Yes there are some negatives and I can remember the first and last names of problem tenants from 20 to 25 years ago. ( I remember this woman who did about $800 worth of damage which was alot at that time) She really trashed the place and seriously just left trash all over the house. But my family and I together have made about 1 million dollars in real estate over 28 years(most of that money was made before the year 2000 so it wasnt the boom that made us that money.) This was done with no more than one $36k income coming in at a time from a job so you dont have to be rich. Most of the properties we bought were low income and yeah, you have to be tough with alot of them. If you cant stand up for yourself, then real estate probably isnt your game. We had washer & dryers stolen from us, we had pipes breaking and having to get up at 5am to fix a flooded bathroom. We had to do lots of painting and yeah, it was a pain in the ass. But it was something we did on the weekends and made us alot more money than we could ever save with a 36k per year job. Nobody said making money is easy. I know many of you like the idea of trading because you just sit there and push buttons and dont have to fix any toilets (in 25 years I think we only fixed 5 or 6 toilets so it wasnt that bad anyway), but if you want to make money, you will have to work. Real estate does not take as much time out of your life as running a business, but on the days that you do work, its hard.
Its a good time to start a tax deed business. You buy the house (in foreclosure) paying only the tax. Once you buy the property in the tax deed sale, you must pay the bid amount to the county clerk's office. Once this fee is paid, the county clerk's office will provide you with a title to the property that is free and clear of any mortgages and liens.
An ex girlfriend from long ago had parents who bought a rental with a target for section 8 tenants in the north bay area of California. The county had a huge program for landlords that provided low income housing because it was so expensive to live there at the time that they had to encourage low income housing. Section 8 tenants ALWAYS have excuses why the rent is late. In the 2.5 years they owned the property, they had 4 tenants and collected exactly 4 rent checks on time. I went to one of the meetings with them that the county put on for section 8 landlords, and the story was the same for everybody. Long on excuses, short on rent checks.
If you do decide to become a landlord, NEVER rent to someone you know. My sister bought a couple of houses to rent a few years ago. Her boyfriend talked her into letting his daughter (and her boyfriend) rent one of them. She almost never paid the rent, got pregnant while there and the boyfriend left. Then my sister's boyfriend talked her into letting his son live in one of the other houses. After not receiving rent for a few months she went to the house and discovered someone else living there. The son had subletted the place and he was collecting the rent. She asked to see the washer and dryer and they said "What washer and dryer?" The son had sold them.
Kinda of like the saying don't do business with friends. A guy told me a similar story. He rented his house to a friend and her many cats sprayed so much he had to replace the carpets and part of the sub floor.
On the contrary; I was a landlord for > 10 years. There is plenty of nonpayment, abuse of the building, drugs and the above behavior from people you do NOT know. It ie better defined as, "if you know someone, and they are not responsible, do not rent to them. It is always the same. Background check, solid contract, references, previous landlords, etc. I found that it was amazing how car ownership and a current job weeded out a lot of bad prospects. And if they know you will do a background check, that also helps. Nowadays, I also add "only accept tenants from an online source", it is amazing how many hardluck people use the newspaper to find a place to rent. The cheaper it is, the more likely they just came out of a halfway house or out of a broken family situation.
I've heard some many different stories about sec. 8 tenants, I don't know which one to believe. Did your ex-girl had sec 8 tenants, that destroyed the place and telling the inspectors that they aren't paying rent is because the landlord is not fixing so and so. When it was really them that destroyed it for the sole purpose of not paying rent? I'm not worried about the rent check since the government would send the 70% check to me on time, however destruction of property is something I want to avoid at all cost.
Imo, buying a property to rent has two results. 1) You rent for cash flow. OR 2) You rent to build equity.