HLS, I totally agree that one shouldn’t plan for sunny day scenario. They should be at least cognizant about the worse case scenario or plan for it. I also agree that people who can’t afford to take a few hundred loss a month shouldn’t be in the business of being a landlord. It’s like any other business. The higher your risk is, the higher your return. But you shouldn’t use sunny day scenario and compare it to stable stuff like CD. Which is why I tend to expect a much higher return from my money than some in order to pull the trigger on a particular property.
Though payout is not guarantee, it can be HUGE under certain circumstances. My sunny day scenario is we’ll see a 70s/80s style inflation. During that time, houses went up 3-4x nominal price. Along with increasing prices, rent also went up a lot too. If you locked in a 30 years fixed, you’re golden. I don’t expect that to happen, but who knows. Even a milder inflation period like the 90s-2000s, you see rent increasing and price increasing. If you have the cash to withstand the bad time, you’re stand to profit handsomely during the good time. Nothing is guarantee, but the potential is there.
