Good point on the profits. I asked my landlord about this as well, when he told he has 2 benefits of owning rentals: cash flow and depreciation. “But you’ll have to pay back the depreciation in taxes when you sell”, I countered. “Yes, but we worry about that later,” he laughed. So, there you have it. Count the millions in paper profits, someday they evaporate, and you are stuck with paying taxes on the little that’s left. He’s a really nice guy, and I hope he figures out how to make money in the declining market. He’s been doing this since the 90’s in SD, so he knows RE can go down, foreclosures happen…