[quote=peterb]
I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.
[/quote]

I’m with you in that I won’t buy now just because of my plans for leveraging rental property.

However, the point is that once the cost of owning so thoroughly beats the cost of renting (as it does in Temecula), it doesn’t matter that it’s depreciating. You’re paying $100/sq and $1,500/month for a beautiful house. Why would you need lots of available cash if things get worse? The economy and housing market can be in the toilet, but you’ve still got a beautiful house, and you’re still only paying $1,500/month for it.