On that $100,000 house, the rent would not be $1066, with the present price to rent ratio of say on the low end in San Diego would be 25, so with that, the rent would be only $4000 a year right now, or $333 a month. The renter could use the excess of $733 a month and invest this. Plus, the renter could also use the money that he didn’t put down for a down payment and invest that in something else as well.
For the original poster:
There are alot of investments out there, and using housing (especially now) as an investment and waiting for appreciation is something that may look good when only a few factors are looked at. I know these real estate “guru’s” tout using leverage to purchase a bunch of properties and waiting for appreciation, and if I knew this market would continue to rise like it has for the last few years, I would be the first one buying up properties like crazy using as much leverage as possible. This market will not do that, it can’t, in fact it is just about impossible for it to continue like this. Consider all the possibilities before you invest in Real Estate.
