There are many cases where there's a lot of money in it - it depends entirely on when and where you buy, and at what price. There are houses near where I lived in 1996-97 which have gone up 4 fold in value - you could have let the properties lie empty and still made a fortune. The last house I acquired was let out on a 10% yield. People who think you can't buy a house with 25% down and generate positive cashflow simply haven't looked hard enough. You also have much more flexibility for development and alteration with houses, especially when they come with land attached. I'm not knocking apartments, just stating that there can be big money in houses too.
I respectfully disagree. To depend upon appreciation to show positive cash flow is not enough for me. Michael B.
Excellent post, onewaypockets. Out of interest, what areas in your experience are the "highest beta" markets in the US? Regarding books, I have the one you mentioned, and would also recommend "The buy and hold real estate strategy" by David T. Schumacher (also focused on California, coincidentally).
i don't suppose that rent amounts have anything to do with the supply of rental units, or the demand for them, or any thing such as that.
Sequoia Equities is a small owner/buyer of apartment investements and they follow this model. I know first hand. Michael B.
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there is great food for thought on this thread. I will read those books. The fear and greed going on inside of me is striking. I calmly and rationally decided to sell my house in San Diego that almost doubled in 4 years for the very reasons onewaypocket mentioned. I had friends who did a bunch of mortgages and they all threw up the warning flags. I did not care about the industry rhetoric because I had seen what happeded in the early 90s and knew that califonria real estate does go down at times. But now I am in Fla and everyone is talking about the baby boom migration that is about to happen. I have fear and greed going on at the same time.