[quote=scaredycat]seems unlikely a 130k house would rent for 1500 for long. [/quote]
It would seem that way but it isn’t. I watched them build the places I referenced, sold new in 02 and 03 for 180-200 range, they rented for $1500 (give or take a hundred based on model and location). In 2006 they were going for just under 400k, still renting for $1500, some recently went for 130k, still renting for $1500, sometimes $1400 for the smallest model. Nice places, 1600 sq ft 3/3, 2 car, nothing fancy, but not shabby either.
I thought of buying one as a rental in 2003, the rent multiplier was o.k., but not great, in 2006 the rent multiplier was stupid, now that it is great, under 100x, there are 10 offers when they are priced that low. Is it because everyone is knife catcher? Or everyone is thinking they will return to 400k? No, it’s because you don’t get that many chances to buy cash flowing rentals, this year is one of those years. Or you can hem and how about how rent will go down, you wont be able to find a renter, that there is risk.
Here comes the sage advice, pay attention here. There is no way to eliminate risk with investments. You can minimize it, you can hedge against it, but you can’t eliminate it. Since you can’t win unless you play the game, any game, you goota get over the fear.
