The rental market moves closely with supply and demand because the longest commitments tend to be one year. The shortest is month-to-month. So it’s a good indicator of what’s going on real-time in the economy. As more “investors” buy and rent out the properties, this should be driving down rental prices if the previous occupants dont stay in the area or live in a higher density situation. Supply may also soar if the foreclosures are allowed to enter the market. This will eventually happen.

As for speculation vs investing, as soon as the word “future” is used….it’s the same thing. No one knows the future. Things can change. Often do in times such as this. Read Bill O’Neils’ books for a careful historical study of how stock investments really pay-off. It has been my experience that his concepts apply to all investing activities.