[quote=infoseeker]Recourse in Money Lending business is difficult. Going after folks defaulting on loan is a risky business… the same issues you will have as with prosper.com. Failure of payment of rent is easier to deal with since eviction of people from rental property is easy compared to a “owned” property. People’s emotional attachment to rental property is less than “owned” property. In addition to cash-on-cash ROI, renting also provides the long term gains that comes with asset appreciation. Depreciation tax write off is an additional advantage of renting.[/quote]
Well, good points. First, I agree with another investor blogger in that you should only invest for cash flow, not taking into account depreciation. Although depreciation is a nice bonus, it should not be taken into the cash flow study when you buy. I’m not sure about being more difficult to get your home back if you sell it. Cali has pretty strong tenant laws. I believe that it might be easier to get a home back though non-payment of the mortgage than eviction from non-payment of rent. The fact that people have less attachment to rentals is a positive for being the mortgage holder rather than a renter. I always include that the tenent will kick in the first$100 on any repair as a way to reduce silly tenant calls.
