Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.
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This hasn’t been true in the past, and I don’t see any reason why it is true now.
When bubbles burst, they overshoot to the downside – there’s a window during this period when it is generally possible to find a property – especially at the low end – which will cash flow immediately as a rental.
Interestingly, in the ’96-’98 timeframe we saw lots of real estate investor activity (the buy-and-hold re investors, not the flippers of the bubble peak). This activity started well before it was apparent the bottom was in and appreciation had started up again.
